Standard Chartered share price falls on analyst downgrade

Shares in Standard Chartered Plc (LON:STAN) have fallen in today’s trading session, after Investec analyst Ian Gordon downgraded, albeit “very reluctantly”, the bank’s stock to “hold” from “buy”. The analyst cited intensified speculation of further management change at the bank and expectations that the company’s Q4 earnings will be “challenged” with “elevated” levels of impairment. Investec forecast a charge of $0.7 billion in the final quarter, taking the company’s overall charge for the year to $2.2 billion.

“Very reluctantly, we downgrade from buy to hold,” Gordon today wrote in a client note, as quoted by The Guardian.“We continue to believe that Standard Chartered has no need to raise capital, and that it would be ill-advised to do so, but we feel like we’re losing that argument.”
Investec trimmed its price target on StanChart’s stock from 1250p to 1000p to reflect a “heightened risk of a capital-raising”. However, Gordon stressed that “we do not recommend shorting the stock”. He pointed out that since February 2, the shares had risen nine percent and added that “if management stands firm and resists pressure to raise capital, we still think that the stock could re-rate materially”.

In today’s trading, Standard Chartered shares were down 0.9 percent at 942.60p, as of 14:38 UTC. The stock has fallen two percent since the start of the year. The company’s market capitalisation currently stands at £23.4 billion.
According to the Financial Times, as of Febuary 14, 2015, the consensus forecast amongst 46 polled investment analysts covering Standard Chartered has it that investors should hold their position in the company. This stance has been maintained since the sentiment of investment analysts deteriorated on May 08, 2013, the FT notes.
As of 15:44 GMT, Tuesday, 17 February, Standard Chartered PLC share price is 945.75p.