Standard Chartered share price: RBC remains bearish on Asia-focused lender

on Mar 6, 2017
Updated: Oct 21, 2019

Standard Chartered (LON:STAN) stands to benefit less than expected from upcoming Federal Reserve rate hikes, analysts at RBC have said as they reiterated their bearish stance on the Asia-focused lender. The comments come after the FTSE 100 group recently updated investors on its full-year performance.

Standard Chartered’s share price has been little changed in London in today’s session, having inched 0.05 percent lower to 745.30p as of 14:13 GMT, slightly outperforming the benchmark FTSE 100 index which currently stands 0.38 percent in the red at 7,346.33 points. The group’s shares have surged more than 53 percent over the past year, and are up by some 12 percent in the year-to-date.
RBC reiterated its ‘underperform’ rating on StanChart today, while lifting its price target on the shares from 570p to 635p, arguing that while the Asia-focused bank stands to benefit from rising rates in the US, it will be by less than implied by its 2018 tangible book valuation (TBV) of 0.8 times.

“We expect STAN to benefit from higher rates but show that STAN‘s geographic mix and structural make-up is sub-optimal in the current world rate environment,” the analysts pointed out, as quoted by Sharecast. “The current 0.8x 2018E TBV valuation implies too much benefit from the world rate environment in our view.”
The comments come after the FTSE 100 group updated investors on its full-year performance last month, noting that it expects operating conditions to remain challenging this year, although some headwinds are easing.
Barclays, which has an ‘underweight’ rating on StanChart, lifted its price target on the stock from 520p to 575p today. Deutsche Bank, which is also bearish on the Asia-focused lender with a ‘sell’ stance, meanwhile set a valuation of 620p on the shares.
As of 14:48 GMT, Monday, 06 March, Standard Chartered PLC share price is 742.40p.

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