StanChart shares surge after upgrades from Barclays and Bernstein

18th Mar 2015 09:26

Shares in Standard Chartered were surging on Wednesday after analysts at Barclays and Bernstein raised their rating on the banking stock.Barclays analysts, which lifted their stance on StanChart from 'equal weight' to 'overweight', said they expect the recent appointment of Bill Winters as chief executive officer (CEO) to "mark a turning point [...] and see plenty of scope for the business to be refocused with a material improvement in returns back towards those of Asian peers".They said that there is also an opportunity for the bank to ease market concerns about credit quality and its capital position. However, they didn't rule out the possibility that the company may have to raise fresh capital.Nevertheless, Barclays pointed out that the stock still remains near an all-time low and trades at just 0.9 times tangible book value, a 50% discount to its peers."The incoming CEO can undertake a more radical restructuring and drive a re-rating of the shares." Barclays raised its target for the shares from 1,000p to 1,150p.Bernstein similarly welcomed the appointment of former JPMorgan banker Winters as a "positive catalyst" as it upgraded StanChart by two notches from 'underperform' to 'outperform'.However, the broker said that the latest round of de-risking at StanChart - likely to continue this year - as well as potential for future disposals and organic capital growth "makes the chances of a capital issue less likely".Bernstein hiked its target price from 700p to 1,200p.StanChart's shares were up 6.2% at 1,024.5p by 10:08.