Standard Chartered Shares (STAN) Hit New High, Outperforming the FTSE

Standard Chartered shares (LON:STAN) are making waves on the LSE, significantly outperforming the FTSE 100 and reaching new 52-week highs. Having hit a new high on Thursday at 1,349.50, this morning's open looks to be a little more cautious.

The bank’s performance over the past year has been nothing short of remarkable. Standard Chartered has delivered a one-year gain of more than 80%, dwarfing the performance of many of its FTSE peers. Since May 1994, Standard Chartered's market capitalization has experienced a compound annual growth rate of 8.6%, climbing from £2.29 billion to £30.08 billion. This long-term growth story underscores the bank's resilience and adaptability to changing trends.

Under the leadership of CEO Bill Winters, who recently celebrated a decade at the helm, Standard Chartered has navigated a complex environment and laid out a clear growth strategy. The bank is focusing on serving large international corporations and affluent individuals, projecting an annual net income growth of 10% from 2025 to 2028. This strategic clarity has been well-received by the market, reassuring investors that the bank has a clear roadmap for future success.

Furthermore, Standard Chartered has demonstrated a commitment to returning value to shareholders. In May, the bank increased its dividend to $0.28 per share, up significantly from the previous $0.09. This represents a yield of more than 2% and signals the bank's confidence in its financial performance and its willingness to share its success with its investors.

Analysts have played a role in bolstering investor confidence. Shore Capital reiterated a “buy” rating for Standard Chartered in May, adding weight to the bullish sentiment. Looking back to March, Citi raised its price target for Standard Chartered from GBX 1,170 to GBX 1,250, maintaining a “neutral” rating. While the rating remained neutral, the price target increase reflected a more positive outlook on the bank's future earnings potential.

Since these votes of confidence, the average price target has now been surpassed by STAN's share price momentum, leaving some to question whether we are approaching full valuation.

There are also potential risks to keep in mind. A global economic slowdown could negatively impact Standard Chartered's operations in emerging markets, which are a key source of its revenue. Increased competition in key markets could also put pressure on its profitability.