Goldman Sachs: Raising the target price of Standard Chartered Group (02888) to HK$267, the next quarter's results are expected to beat expectations

The Zhitong Finance App learned that Goldman Sachs released a research report stating that it raised the 12-month target price of Standard Chartered Group (02888) Hong Kong stocks from HK$242 to HK$267 and maintained a “buy” rating. Goldman Sachs said the target price-earnings ratio was raised from 10.25 times to 11.5 times due to increased confidence in Standard Chartered's management's implementation of the strategic plan to achieve ROTE by about 18% in fiscal year 2030.

The bank updated its forecast before Standard Chartered announced its results for the second quarter of this year on July 29. The bank predicts Standard Chartered's net profit after tax for the second quarter (after deducting AT1) of about US$1.6 billion, which is 5% higher than market consensus expectations. At the same time, Goldman Sachs's profit forecast for the 2026-2028 fiscal year is also 2% to 4% higher than market consensus, mainly due to a more constructive view of the increase in fee income and net interest income, and expects the return on statutory tangible shareholders' equity (ROTE) to reach 13.6% in 2026, which is higher than the company's guideline of 12%.

Goldman Sachs pointed out that Standard Chartered's statutory revenue for the second quarter is expected to be around US$5.6 billion, up 2% year on year, with corporate and investment bank revenue rising strongly by 4% year on year. Net interest income for the second quarter is expected to be around US$2.9 billion, higher than market expectations of 2%. It recorded a slight improvement from quarter to quarter, partly affected by the rise in Hong Kong Interbank Interest Rate (HIBOR) levels during the quarter and the number of days in the second quarter. In terms of asset quality, the bank lowered its credit cost forecast. The credit impairment for the second quarter is expected to be about US$220 million, 11% lower than the consensus forecast, and the full year credit cost ratio is 32 basis points, which is lower than the market consensus. Additionally, Goldman Sachs expects Standard Chartered to announce a share repurchase plan of about 1 billion US dollars when announcing the second quarter results, bringing the share repurchase scale for the full year of 2026 to about 2.5 billion US dollars.