Nomura has raised its target price for emerging markets lender Standard Chartered from 1,800p to 2,050p and reiterated its 'buy' rating, saying that the stock's year-to-date outperformance could continue.

After underperforming the market in January, Nomura says that StanChart has caught up with its European peers and is now up 4.0% relative to the sector.

"With improving trends in Asia, STAN should be able to regain some of its growth multiple, in our view. While challenging in the current global economic outlook, we believe STAN can manage to grow [earnings per share] at double digits, and even if growth falters to high-single digits, it can offset this by delivering positive operating leverage," the broker said in a research note.

With footprint nominal gross domestic product (GDP) growth four years forward of 7.5-8% (on IMF estimates), Nomura reckons that StanChart should be able to achieve double-digit growth rates over the coming year.

"Not many banks possess the growth prospects and balance sheet strength that this group has."

While a 'hard landing' in China is an obvious risk to the investment case at StanChart, Nomura said that the slowdown to 7.3% GDP growth estimated for the second half will not be an issue.

"These are still higher levels of growth than many other developed countries will see in the next few years."

At the company's full-year results on March 5th, the broker expects StanChart to retain its double-digit income and EPS growth guidance for 2013.

By 11:15 in London, shares were up 1.69% at 1,773.5p.

BC

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