Standard Chartered Undervalued After Profit Rise

Morningstar analysts believe Standard Chartered is undervalued as the Asia-focused bank reported a 37% rise in quarterly profits

Michael Wu 31 October, 2018 | 2:51PM

Standard Chartered Profits Rose

Shares in Standard Life (STAN) rose on Wednesday after a 37% rise in quarterly profits on the same period of last year. Morningstar analysts believe the bank is undervalued and the market is overly concerned about global trade. The bank’s fair value estimate remains at 740p, above a current price of around 554p.

There was little in Standard Chartered’s third-quarter result that alters our long-term view on the bank. Costs were contained in the third quarter with operating expense, excluding regulatory costs, 4.7% lower than the previous quarter. Second-half operating expense will be at a similar level to the first half and our full-year forecast is largely in-line. Combined with the bank's restructuring effort, we expect profitability to steadily increase over the medium term as operating environment improves.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Standard Chartered PLC400.50 GBX0.05

About Author

Michael Wu  is a Senior Equity Analyst for Morningstar Asia

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