Standard Chartered share price forecast: Will STAN’s rebound remain on track?
The share price for UK-based multinational banking group Standard Chartered (STAN) has climbed by more than 7% since the start of the year, extending gains that began in early November.
The STAN stock price has reached its highest level in two years, reversing the losses of the Covid-19 pandemic.
What has been driving the share price higher? Is there potential for further gains or has the stock topped out?
Let’s look at the stock’s performance and some of the latest Standard Chartered share price predictions from analysts.
What is StanChart?
Standard Chartered, also known as StanChart, was established in 1969 from a merger between the Standard Bank of British South Africa and the Chartered Bank of India, Australia and China. The banks had benefited from the expansion of trade between Asia, Europe and Africa.
While Standard Chartered is headquartered in the UK, it does not conduct any retail banking business in the UK. The company’s largest market is China.
StanChart’s primary stock market listing is on the London Stock Exchange (LSE) and it is included in the FTSE 100 Index (UK100) of the 100 largest companies on the LSE by market cap. It also has secondary listings on the Hong Kong Stock Exchange, the National Stock Exchange (NSE) of India and the over-the-counter (OTC) Pink Market.
Standard Chartered’s largest shareholder is Temasek Holdings, an investment company owned by the Government of Singapore.
What is your sentiment on STAN?
StanChart share price reflects China volatility
The Standard Chartered share price fell in 2020 as economic activity in Asia slowed during Covid-19 restrictions, with the share price bottoming out at £3.37 in September of that year. The stock rebounded to £4.66 by the end of 2020 and rose to £5.20 by April 2021, but the price came under pressure later in the year and fell to £4.48 by the end of December.
In 2022, the STAN price initially rose to £5.81 but fell to £4.50 on 7 March as stocks fell in response to the Russian invasion of Ukraine and renewed lockdowns in China. The stock recovered to £6.33 in June but subsequently traded down and bottomed out at £5.20 in October. The share price has since trended higher as market sentiment has improved with the prospect of the US Federal Reserve (Fed) slowing the pace of rate hikes and China reopening its economy.
The share price gains have accelerated since 30 December as China has rapidly relaxed its Covid-19 restrictions, climbing from £6.22 on 30 December to £7.05 on 5 January.
On 4 January, the share price rose from £6.40 to £6.60 after Standard Chartered said that it had become the first foreign bank to participate in treasury bond futures trading in China. Jerry Zhang, executive vice chairman and chief executive officer (CEO), Standard Chartered China, stated:
On 5 January, the stock climbed from £6.60 to £7.05 in response to reports that First Abu Dhabi Bank (FAB), the biggest lender in the United Arab Emirates and one of the largest banks in the Middle East, said that it had considered a bid for the company but was no longer exploring a takeover. Standard Chartered has long been a takeover target, with UK banking giant Barclays having considered a bid in 2018.
The share price has also been supported in recent sessions by a report that the Chinese government is preparing a new round of measures to relieve stress in the country’s real estate sector.
What is the outlook for Standard Chartered’s performance?
The company’s revenues have fallen in recent years following a rapid expansion into emerging markets. Bill Winters, a former J.P. Morgan executive, has been CEO since June 2015, tasked with turning around the company’s performance. Rising interest rates are improving the company’s outlook and the reopening of China and Hong Kong are improving its prospects.
For the third quarter, StanChart reported a return on tangible equity of 10.1%, up by 3.8 basis points from the third quarter of 2021. Income rose by 15% to $4.3bn on a normalised basis and 22% on a constant currency basis, reflecting the impact of exchange rate volatility on its results. Net interest income was up 24% at constant currency on a normalised basis. Earnings per share increased by $0.10, or 43%, to $0.331.
The company expects its full-year income to rise by around 13% in line with its year-to-date growth. That is driven in part by its double-digit income growth in China despite the macro challenges in the region.
“In the markets in our footprint, we see plenty of reasons to be optimistic about 2023. And we see a continued recovery post the pandemic. We see economic growth rates remaining healthy and inflation is not on the same scale or the same issue as we see in the West,” Winters said on the quarterly earnings call.
What is the outlook for the STAN share price given the company’s recent performance?
Below, we look at the potential Standard Chartered stock forecast as offered by market analysts.
Standard Chartered share price forecast: will the stock climb further or is a pullback due?
At the time of writing, the average 12-month price target from six Wall Street analysts that have issued a Standard Chartered share price forecast was £8.15, according to data provider MarketBeat, ranging from a low of £7.50 to a high of £9. Four of the analysts have issued buy recommendations, compared with two hold ratings and no sell recommendations.
Following Standard Chartered’s earnings report on 26 October, analysts at Shore Capital reiterated their buy rating and Jason Napier at UBS set a price target of £8.55 a share. On 27 October, Berenberg Bank reiterated its buy rating with the low end Standard Chartered share price forecast of £7.50 and Robert Noble at Deutsche Bank reiterated a buy rating and set the high end of the forecast range at £9 per share.
However, the Standard Chartered share price forecast for 2023 from economic data provider Trading Economics indicated that the stock could move up to £6.74 by the end of this quarter and then fall to £6.20 in one year, based on global macro model projections and analysts’ expectations.
Looking further ahead, the Standard Chartered share price forecast for 2025 from algorithm-based forecaster WalletInvestor at the time of writing projected that the price could fall to £5.96, trending lower from £6.44 at the end of this year.
When consulting any Standard Chartered stock forecast, it’s important to remember that market and macroeconomic volatility can make it difficult for analysts and algorithm-based forecasters to come up with accurate long-term predictions. As such, they can and do get their predictions wrong.
You should always do your own research. Look at the latest market trends, news, technical and fundamental analysis, and expert opinion before making any investment decision. Keep in mind that past performance is no guarantee of future returns. And never invest money you cannot afford to lose.
FAQs
Is Standard Chartered a good stock to buy?
Whether Standard Chartered is a good stock for you to buy depends on your portfolio composition and investing time horizon.
Will Standard Chartered stock go up or down?
The direction of the STAN share price in the future will likely depend on the company’s performance as well as macroeconomic sentiment and government monetary policies on interest rates, among other factors. Keep in mind that past performance is no guarantee of future returns.
Should I invest in Standard Chartered stock?
Deciding whether to invest in STAN or any other asset is a personal call only you can make depending on your financial circumstances, risk tolerance and trading approach. You should do your own research to make an informed decision.
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