Broker snap: Evolutions downgrades Standard Chartered to neutral

2nd Nov 2011 10:38

Evolution Securities has downgraded banking giant Standard Chartered from buy to neutral, highlighting the stock's recent strong performance and continuing headwinds.Evolution notes that Standard Chartered's shares are up around 23% in just four weeks, while Lloyds has actually fallen.In the broker's last Standard Chartered note on 6 October, it predicted that today's third quarter statement would "stand out in the gloom" and meet market expectations. Analyst Ian Gordon said that this morning's statement generally meets this description, but "making the numbers has perhaps been a bit more of a stretch". The broker notes that the pace of income growth slowed from 10.6% in the first half (compared to the previous year) to just a 'high single-digit' growth in the nine-month period: "The deceleration in Q3 reflects an expected further slowdown in India, a "muted" performance in Korea, a weak Q3 for Principal Finance realisations and a lower run-rate in Wealth Management."While Evolution still likes the group's "attractive long-term growth story", it moves the rating to neutral, saying that there is better near-term value in peers Barclays and RBS.A 1,800p target price is left unchanged.Shares were trading 3.86% lower at 1,383p by 10:14.BC