Analysts at Berenberg have upgraded their recommendation on troubled emerging markets focused bank Standard Chartered to “buy”, due to a strategy switch to return and risk.
Standard Chartered has previously focused on growth alongside fast growing emerging markets.
General analyst consensus has been moving against Standard Chartered in recent months, with the latest survey of 22 analysts from Thomson reporting just four analysts recommending a “buy” rating compared to six two months ago.
Berenberg analyst James Chappel writes: “We no longer view Standard Chartered as a long-term loser among the European Banks. Recent events mean that Standard Chartered has the three catalysts in place to change – a core business to focus on, enough capital to afford change and external management.”
Chappel acknowledges ongoing risks however from the strengthening dollar and further emerging market weakness and commodity price declines.
Investec banking analyst Ian Gordon has reiterated his “hold” recommendation on the bank however, arguing the risk and reward position was “uncompelling”.
Gordon told City A.M.: "It’s difficult to price a moving target. There is a logical plan but there is a huge amount to do in the face of a relentless headwinds on the revenue line."
“Market estimates still seem to be overly optimistic,” Gordon added.