Last Update 27 Jan 26

Fair value Increased 3.66%

STAN: Future Returns Will Rely On Crypto Expansion And Careful Risk Balance

Analysts have nudged their fair value estimate for Standard Chartered up from £16.68 to £17.29, supported by recent Street price target increases to £21.22 at Morgan Stanley and £17.75 at Citi. They link these changes to modestly higher assumptions for revenue growth, profit margins and future P/E.

Analyst Commentary

Recent research points to a series of higher price targets for Standard Chartered, which ties directly into the higher fair value estimate. These moves give you a sense of how the Street is thinking about the bank's ability to execute on revenue, profitability and capital deployment over time.

Bullish Takeaways

Bullish analysts have lifted price targets into a range around 1,675 GBp to 2,122 GBp, which supports the higher internal fair value estimate of £17.29 and implies confidence that current pricing leaves some room for better execution to be recognised.
The step up in targets over time from 1,525 GBp to 1,675 GBp and then to 1,775 GBp signals a gradually more constructive view on the bank's earnings power, even where ratings remain Neutral.
Higher targets are consistent with the view that modestly stronger revenue growth and margins could justify a higher future P/E, which feeds directly into a richer valuation framework.
The range of Street targets provides a reference band for investors who are comfortable using external research as a cross check against their own assumptions on growth, returns and capital efficiency.

Bearish Takeaways

Even with higher price targets, some research still carries a Neutral stance, which suggests that not all analysts see a clear margin of safety at current levels.
The reliance on modestly higher assumptions for revenue growth and profit margins means the thesis is sensitive to any shortfall in execution, which could limit upside to the new targets.
The linkage to a higher future P/E embeds an assumption that the market will be willing to pay more for the same stream of earnings, which may not materialise if sentiment weakens.
The spread between the higher end of the target range at 2,122 GBp and lower targets around 1,675 GBp underlines that there is still disagreement on how much value investors should assign to the current business mix.

What's in the News

Standard Chartered is preparing to launch a prime brokerage for crypto trading within its SC Ventures division, which would sit alongside existing offerings such as Zodia Custody (Bloomberg).
The planned crypto prime brokerage structure is reported to be in early discussions and could be set up in a way that avoids some of the stricter Basel III capital requirements for digital assets (Bloomberg).
Standard Chartered is reviewing its retail credit card business in India as part of a broader reshaping of its operations in the country, including preliminary talks with stakeholders and a prior sale of its personal loan portfolio (Bloomberg).
From August 1, 2025 to September 30, 2025, the bank repurchased 6,086,001 shares, equal to 0.26% of its share base, for a total of $135m, completing the buyback announced on August 4, 2025.

Valuation Changes

The Fair Value Estimate has risen slightly from £16.68 to £17.29, reflecting the updated internal assessment of the shares.
The Discount Rate has edged down marginally from 8.39% to 8.38%, which gives a small uplift to the present value of future cash flows.
The Revenue Growth assumption has moved up modestly from 4.60% to 4.73%, indicating a slightly stronger top line outlook in the model.
The Net Profit Margin assumption has increased from 25.08% to 25.33%, pointing to a small improvement in expected profitability on each pound of revenue.
The Future P/E has been raised from 9.95x to 10.39x, meaning the valuation now applies a somewhat higher multiple to projected earnings.

Strong positioning in emerging markets and digital innovation is driving sustainable growth, expanded client acquisition, and increasing new revenue streams.
Enhanced efficiency, focus on higher-return segments, and improved asset quality are supporting margin improvement and more stable returns despite macroeconomic challenges.
Margin compression, execution risks in digital transformation, reliance on volatile revenues, emerging market exposure, and rising fintech competition threaten growth, profitability, and market share.

Catalysts

About Standard Chartered

Provides various banking products and services in Asia, Africa, the Middle East, Europe, and the Americas.What are the underlying business or industry changes driving this perspective?

The company is strongly positioned to benefit from robust economic growth and growing financial services demand in Asia and other emerging markets, as evidenced by double-digit income growth in Global Banking, Global Markets, and Wealth Solutions; continued geographic expansion and growing client onboarding is likely to drive sustainable top-line growth. (Impacts: Revenue, future earnings)
Standard Chartered's leadership and innovation in digital banking and financial inclusion, including rapid growth in digital ventures such as Mox and Trust, high digital client acquisition, and ongoing expansion in digital assets and stablecoins, position it to lower operating costs and capture new revenue streams at scale, improving cost-to-income ratio and net margins over time. (Impacts: Net margins, cost-to-income ratio)
Increased cross-border trade and the company's ability to facilitate evolving supply chains-illustrated by surging intra-ASEAN corridor income and growing demand for trade finance, FX, and risk management solutions-suggest secular tailwinds for continued growth in fee-based income and transaction volumes. (Impacts: Fee income, revenue)
Ongoing digital transformation and operational efficiency programs (such as Fit for Growth), combined with cost discipline and investment in automation, support structurally lower long-term expenses and sustainable margin improvement even as the company continues to invest in growth. (Impacts: Net margins, operating expenses)
The company's focus on higher-return segments (Wealth Solutions, sustainable finance, and digital assets) and improved asset quality in volatile markets-benefiting from lower credit impairments and resilient loan books-should contribute to more stable earnings and buttress return on equity in the face of macroeconomic headwinds. (Impacts: Earnings, RoTE, credit costs)

Standard Chartered Earnings and Revenue Growth

Standard Chartered Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Standard Chartered's revenue will grow by 3.4% annually over the next 3 years.
Analysts assume that profit margins will increase from 22.3% today to 22.8% in 3 years time.
Analysts expect earnings to reach $5.1 billion (and earnings per share of $2.45) by about September 2028, up from $4.5 billion today. However, there is some disagreement amongst the analysts with the more bullish ones expecting earnings as high as $6.2 billion.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 8.4x on those 2028 earnings, down from 9.3x today. This future PE is lower than the current PE for the GB Banks industry at 8.5x.
Analysts expect the number of shares outstanding to decline by 7.0% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.34%, as per the Simply Wall St company report.

Standard Chartered Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Persistent margin pressure from declining HIBOR (Hong Kong Interbank Offered Rate) and lower rates in key Asian markets, with management guidance that 2025 net interest income (NII) is expected to be down year-on-year; prolonged low or volatile global rates could continue to compress net interest margins and limit earnings growth.
Overdependence on episodic and market-related revenues in Global Markets, which have been elevated due to recent volatility but are not considered sustainable at this pace; normalization or volatility subsiding could significantly impact fee and trading revenue, resulting in slower top-line growth.
Execution risk around large-scale digital transformation ("Fit for Growth") and digital asset initiatives-delays, cost overruns, or inability to match fintech agility could result in higher costs, operational inefficiencies, or missed growth opportunities, thus depressing operating leverage and net margins.
Continued overexposure to emerging markets and related sovereign credit risk-recent increases in Stage 2 loans driven by sovereign downgrades and the expectation of a normalized, higher loan loss rate may lead to higher provisions and weaker net earnings if macroeconomic volatility escalates.
Increasing competition from fintechs and new market entrants in digital assets, payments, and open banking, alongside evolving, stricter and potentially divergent regulatory requirements (ESG, capital, digital assets), could erode Standard Chartered's market share, increase compliance costs, and create additional execution risk, thereby weighing on long-term revenue growth and return on equity.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of £13.486 for Standard Chartered based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of £16.47, and the most bearish reporting a price target of just £10.87.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $22.2 billion, earnings will come to $5.1 billion, and it would be trading on a PE ratio of 8.4x, assuming you use a discount rate of 8.3%.
Given the current share price of £13.6, the analyst price target of £13.49 is 0.8% lower. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Analyst Commentary Highlights Mixed Outlook as Standard Chartered Sees Modest Valuation Upgrades