JPM Predicts STANCHART (02888.HK) Legal Settlement Will Cap Shr Buyback Potential, Maintains Investment Outlook

The analyst rating for STANCHART (02888.HK) is maintained at "Overweight" by JPMorgan due to the belief that the recent litigation settlement will have a limited negative impact on the company's operational results or financial condition. Although the settlement may reduce the CET1 ratio and potentially limit share buyback upside in 2026, JPMorgan expects the impact on the CET1 ratio to be less than approximately 13 basis points. The firm does not see this event as altering its overall investment view on STANCHART, hence the positive rating and target price of $190.

The analyst rating for Standard Chartered (STANCHART) is based on several key factors highlighted in the JP Morgan report. The reasons for the positive rating include: 1. Strong 3Q Results: Standard Chartered reported robust financial performance in the third quarter, which positively influenced the analysts' outlook. 2. Investor Meeting Insights: Insights gained from a meeting with the bank's CFO, Diego De Giorgi, contributed to a more favorable assessment of the bank's prospects. 3. Increased EPS Forecast: JP Morgan raised its earnings per share (EPS) forecast for Standard Chartered for the years 2025-2027 by 3-6%, driven by expectations of stronger revenue and lower provisions. 4. Target Price Increase: The target price for Standard Chartered was raised from HKD 168 to HKD 190, reflecting a forecasted 13% growth in EPS and a 14% adjusted return on tangible equity (ROTE) by 2028. 5. Overweight Rating: JP Morgan maintained an Overweight rating on Standard Chartered, indicating a positive outlook compared to other stocks in the sector. Overall, the combination of strong financial results, improved forecasts, and positive insights from management led to the favorable analyst rating.