Berenberg hikes target price on Standard Chartered

Analysts at Berenberg hiked their target price on financial services company Standard Chartered from 640.0p to 750.0p on Friday, citing a "moment of clarity" for growth and returns.

Berenberg stated Standard Chartered's recent first-quarter results, and the 14% share price reaction that accompanied it, had transformed the company into the third-best performing bank in its coverage year-to-date.

"Standard Chartered's Q1 2022 pre-tax earnings exceeded consensus expectations by 38%. This reflected stronger revenues, which rose 9% year-on-year and exceeded consensus by 11% – partly due to strong financial market activity. The bank also achieved this performance without meaningfully higher costs relative to consensus," noted Berenberg.

While the German bank believes that the reaction partly reflects low expectations and Standard Chartered's "cheap" valuation prior to the results, it said the bank's revenue and cost outlook has also improved.

"Trading on 5.8x our FY 2023E EPS (which are 9% above consensus), we believe that Standard Chartered remains undervalued," said the analysts, who also stood by their 'buy' rating on the stock.