JP Morgan: Raises target price of STANCHART (02888) to 295 Hong Kong dollars, suggesting that any post-earnings pullback could be a buying opportunity.

J.P. Morgan released a research report stating that they have adjusted their forecast for Standard Chartered (02888) net interest income growth for the 2026 fiscal year to 2%, higher than management guidance and market expectations, and expect total income to grow by approximately 6%. The bank has rolled over its target price valuation benchmark to December 2027, raising the target price for Standard Chartered from HKD 275 to HKD 295, while maintaining a "overweight" rating. J.P. Morgan expects Standard Chartered's adjusted pre-tax profit in the second quarter to contract by about 15% year-on-year, mainly due to the high base effect brought about by the USD 238 million gain from the sale of Solv India in the second quarter of 2025 and higher incidental income, as well as cost prepayments. However, the bank believes that if Standard Chartered's stock price experiences a pullback due to weak second-quarter performance, it will provide a buying opportunity, as its underlying operational trends remain strong, with Chinese corporate cross-border business and network income bringing tailwinds. The bank estimates that Chinese corporate investments and business (including network income from China) account for about 10% of Standard Chartered's total income. With the mainland relaxing cross-border regulations for businesses and speeding up the internationalization of the renminbi, there are potential supports for non-interest income assumptions. In addition, the bank expects Standard Chartered to repurchase USD 1 billion in the first half of 2026, while the total return ratio (dividends and buybacks/profits) is expected to increase from 42% in the first half of 2025 to 48% in the first half of 2026.