Standard Chartered shares downgraded after tariff bruising
Analysts at UBS slapped a downgraded price on Standard Chartered’s shares after a bruising period for the lender amid geopolitical tensions.
The analysts reduced the target share price to 1,215p from 1,310p but maintained their ‘Buy’ rating.
Shares were down 0.6 per cent on Wednesday at 1,049p.
In the fallout of President Donald Trump’s ‘Liberation Day’ levies, Standard Chartered’s five-day losses sank 20 per cent.
The FTSE 100 giant’s ties to Asian economies, which Trump slapped with the steepest tariffs, drove the stock’s plummet.
The bank’s operations take a focus on the growing middle class in countries such as India, China and Indonesia through offering a variety of retail services, which include savings and checking accounts.
The lender booked a pre-tax profit of $2.1bn (£1.6bn) for the first quarter – which narrowly missed Trump’s tariff onslaught.
Profit was boosted by a 28 per cent surge in its wealth management arm’s operating income and 17 per cent growth in global banking compared with the first quarter of 2024.
Investors ‘on the sidelines’
UBS analysts forecasted 44 per cent growth in earnings per share by 2027, but predicted investors some may seek greater stability in the short-term amidst a waning macro environment.
“The market-heavy nature of the first quarter earnings beat and uncertainty around tariff-related headlines will, we think, keep some on the sidelines for now, a view supported by an earnings call which was heavily skewed towards trade.
“We think Standard Chartered is more diversified and has better growth potential than the valuation indicates with downside risks mitigated to some extent by a significant cost programme and payout plans which we think deliver 10-12 per cent distributed yields,” analysts Jason Napier, Sanjena Dadawala and Helen Li said.
But, they highlighted net interest income (NII) as an “area of uncertainty”.
The lender’s first-quarter NII was in line with consensus at $2.8m, but fell six per cent quarterly.
The firm’s net interest margin – a key metric measuring a bank’s profitability from lending – shrunk by nine basis points to 2.12 per cent.
Analysts named “headwinds from falling rates and margin compression” as driving the declines.