26% Growth At Standard Chartered PLC!

Standard Chartered PLC (LON: STAN) looks set to take off.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Growth forecasts for banks tend to be unexciting affairs, don’t you think? A few percent here, a bit more in dividends there, but generally pretty plodding.

Well, that’s certainly not the case with Standard Chartered (LSE: STAN), which has a 26% leap in earnings per share (EPS) forecast for the year ending December 2014. That does come after 2013 results that showed a 17% fall, but with a further 10% growth in EPS predicted for 2015, the City’s analysts are clearly expecting good things from the bank.

China

stanThe big fear for a bank like Standard Chartered, which earns the bulk of its profits in the Asia-Pacific region, is China. Chinese growth has been massive in recent years, but the country is experiencing something of a credit boom and property prices are overheating a little — and we’ve seen what the double-whammy of those two booms coming to an end did in the West!

Still, some of that fear does seem to be factored into the Standard Chartered forecasts, as the consensus for 2014 has dropped significantly over the past 12 months. A year ago, the crystal ball was showing a shadowy figure of 173p in EPS, but as its come into crisper focus it has fallen to the current 127p.

And we have a fairly wide range of individual forecasts, too — but that’s not surprising, as it is pretty much impossible to quantify any possible threat from China right now.

The pundits are split

What about dividends? Forecasts there have been scaled back over the past year, too, slipping from a mooted 66.3p to the latest suggestion of 52.9p. But on today’s share price of 1,304p, that would still represent a well-covered yield of 4.1% — and it’s an attractive proposition.

But it all comes back to this Chinese uncertainty, and the question is splitting the recommendations we’re getting from the experts. We have 12 out of 29 forecasters putting a Strong Buy label on Standard Chartered, but at the same time five of their City colleagues are moved to a Strong Sell recommendation — and opinions are rarely as polarised as that.

How are you with risk?

What should we make of it? The so-called consensus isn’t actually much of a consensus with such a split in recommendations, but the one thing it does confirm is that Standard Chartered could be a bit of a risky investment right now. If you prefer safe investments, you might be as well to steer clear, but if you like a bit of a gamble…

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Alan does not own any shares in Standard Chartered. The Motley Fool owns shares in Standard Chartered.

More on Investing Articles

Passive income text with pin graph chart on business table
Investing Articles

Yields of up to 7%! I’d consider boosting my income with these FTSE dividend stocks

The London market has some decent-looking dividend stocks right now, and I’m tempted by these two for growing income streams.

Read more »

Young mixed-race couple sat on the beach looking out over the sea
Investing Articles

I’d put £20K in an ISA now to target a £1,900 monthly second income in future!

Christopher Ruane shares why he thinks a long-term approach to investing and careful selection of shares could help him build…

Read more »

Mature couple at the beach
Investing Articles

6 stocks that Fools have been buying!

Our Foolish freelancers are putting their money where their mouths are and buying these stocks in recent weeks.

Read more »

Black woman using loudspeaker to be heard
Investing Articles

I was right about the Barclays share price! Here’s what I think happens next

Jon Smith explains why he still feels the Barclays share price is undervalued and flags up why updates on its…

Read more »

Investing Articles

Where I’d start investing £8,000 in April 2024

Writer Ben McPoland highlights two areas of the stock market that he would target if he were to start investing…

Read more »

View of Tower Bridge in Autumn
Investing Articles

Ahead of the ISA deadline, here are 3 FTSE 100 stocks I’d consider

Jon Smith notes down some FTSE 100 stocks in sectors ranging from property to retail that he thinks could offer…

Read more »

Young female business analyst looking at a graph chart while working from home
Investing Articles

Why I think Rolls-Royce shares will pay a dividend in 2024

Stephen Wright thinks Rolls-Royce shares are about to pay a dividend again. But he isn’t convinced this is something investors…

Read more »

Investing Articles

1 of the best UK shares to consider buying in April

Higher gold prices and a falling share price have put this FTSE 250 stock on Stephen Wright's list of UK…

Read more »