Goldman Sachs has released a research report updating its forecasts for Standard Chartered (02888). This follows the bank's recent investor day events held from May 19th to 21st, where it reaffirmed its 2026 objectives, outlined several key structural trends, and established new targets for 2028. The firm maintains its 'Buy' rating on Standard Chartered, with its 12-month target price for the Hong Kong-listed shares also unchanged at HK$242.

The report notes that the new targets set by Standard Chartered's management during the event include: a compound annual growth rate (CAGR) for revenue between 5% and 7% from 2025 to 2028 (excluding significant items); a cost-to-income ratio (CIR) of approximately 57%; an expected credit loss (ECL) ratio cycle level of 30 to 35 basis points; a high-single-digit to low-double-digit CAGR for earnings per share from 2025 to 2028; a dividend payout ratio of over 30% with a progressive dividend per share; and an operating range for the common equity tier 1 (CET1) capital ratio of 13% to 14%. Goldman Sachs anticipates that improvements in the business mix will support an increase in return on tangible equity (ROTE) of about 380 basis points, aiming to achieve the new targets of over 15% by 2028 and approximately 18% by 2030.

Regarding forecast adjustments, Goldman Sachs has raised its revenue projections for 2027 and 2028 by 1% to 2%, expecting a revenue CAGR of 6.6% from 2025 to 2028. Concurrently, due to assumptions regarding business investment, the firm has increased its operating expense forecasts for 2026, 2027, and 2028 by approximately 0.5%, 1.5%, and 2.5%, respectively, while lowering its credit cost estimates. Overall, the bank's earnings per share forecasts for 2026 to 2028 remain largely unchanged.