Broker snap: StanChart is attractively valued, says Nomura

27th Jun 2013 08:20

Nomura has maintained its positive stance on Asia-focused bank Standard Chartered after its second-quarter results on Wednesday, saying that the stock is looking attractive relative to Asian peers.The broker said that the stock trades at a 25% discount relative to other Asian banks on a one-year forward price-to-earnings basis.A 'buy' rating has been maintained but Nomura has reduced its target price for the shares from 1,880p to 1,830p."We see 2013 consensus estimates stabilising which should help improve sentiment on the stock and help close the relative valuation gap. "2014 estimates tend to be lazy, but should start reflecting current outlook over the coming weeks, which should stabilise 2014 earnings momentum."Nevertheless, the broker said that this is priced in given the stock's recent correction and underperformance. "We maintain a slightly cautious stance relative to consensus, but still see the stock as attractively valued."As for the macro-political outlook, Nomura said that uncertainty regarding policy in China and the US will raise fears of a hard landing and a liquidity tightening, "but this should help a liquid bank like Standard Chartered to outperform".