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(Sharecast News) - Citi reiterated its 'neutral' rating on Standard Chartered on Wednesday after the company's investor update a day earlier.
In an update on Tuesday, StanChart announced plans to cut nearly 8,000 jobs and set higher medium-term profitability targets.
"We welcomed the investor update which clearly outlined the differentiating factors in the StanChart business model and where incremental investment is envisaged to position the bank for the future and drive structural top-line growth," Citi said.
"Trading on 1.1x P/TB for a more than 15% target return on tangible equity in 2028 and 5-7% target revenue compound annual growth rate, the stock appears inexpensive."
That said, Citi expects the initial debates will focus on the 2027-28 cost trajectory and capital allocation priorities, with the targets implying a step-up in cost growth and potentially lower buybacks than consensus assumes. This may limit consensus earnings per share upgrades and hold the shares back near-term, it said.
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