Broker snap: Investec cuts targets at Standard Chartered

12th Dec 2011 10:20

Investec has cut its targets for emerging markets-focused bank Standard Chartered and reiterated its hold rating on the stock following its pre-close trading update published last week."The pre-close statement last week was a mixed bag. Consumer and client flows in Wholesale showed double-digit growth, with non-client income growth in Wholesale slowing," said analyst Arun Melmane.The broker says that while Standard Chartered will probably reach consensus estimates for pre-tax profit this year "as impairments continue to be low", forward consensus is slightly too bullish "given a possible slowdown in Asia and impairments currently at cyclical lows". The target price is scaled back from 1,650p to 1,550p. "We acknowledge the strength of the management team in driving the quality of the results with low levels of current impairments, but don't see large upside in the stock price from current levels given the need for continued strong volume growth and the below normalised impairments levels needed into the future in a slowing macroeconomic environment to meet current consensus estimates," Melmane said.Shares down 2.16% by 10:19 on Monday morning, broadly in line with the relative banking sector which was down 2.33%. Standard Chartered's share price stood at 1,427p, down from Friday's close of 1,458.5p.BC