Goldman Sachs: Update forecast for STANCHART (02888), reiterate "buy" rating, target price maintained at 242 Hong Kong dollars.

Goldman Sachs released a research report stating that it has updated its forecast for STANCHART (02888). Prior to this, Standard Chartered reiterated its 2026 targets at an investor day event on May 19-21, outlining several key structural trends and setting new targets for 2028. The bank maintained its "buy" rating on Standard Chartered, with a 12-month target price of 242 Hong Kong dollars. The report pointed out that the new targets set by Standard Chartered management at the event include: a compound annual revenue growth rate (CAGR) between 5% and 7% for 2025-2028 (excluding major projects); a cost-income ratio (CIR) of around 57%; a credit loss ratio (LLR) at a cyclical level of 30 to 35 basis points; a high double-digit compound annual earnings growth rate for 2025-2028; a dividend payout ratio of over 30% with progressive per share dividends; and an operating range of core Tier 1 capital adequacy ratio (CET1) of 13% to 14%. The bank expects that business portfolio improvements will support an increase of approximately 380 basis points in tangible return on equity (ROTE) to achieve new targets of over 15% by 2028 and around 18% by 2030. In terms of adjusted estimates, Goldman Sachs raised revenue forecasts for 2027 and 2028 by 1% to 2%, expecting a compound annual revenue growth rate of 6.6% for 2025-2028. Additionally, due to business investment assumptions, operating expense forecasts for 2026, 2027, and 2028 were respectively raised by approximately 0.5%, 1.5%, and 2.5%, but credit cost forecasts were lowered. Overall, the bank's earnings per share forecasts for 2026-2028 remain essentially unchanged.