Goldman Sachs has issued a research report, increasing the 12-month price target for the Hong Kong shares of Standard Chartered (02888) from HK$242 to HK$267 and maintaining its "Buy" rating.

The firm stated that the increase in the target price-to-earnings multiple from 10.25x to 11.5x is due to growing confidence in management's execution of strategic plans to achieve a return on tangible equity of approximately 18% by the fiscal year 2030.

The bank updated its forecasts ahead of Standard Chartered's second-quarter results announcement on July 29. It predicts the group's post-tax profit (after AT1 deductions) for Q2 will be around $1.6 billion, which is about 5% above market consensus.

Furthermore, Goldman Sachs' profit forecasts for the fiscal years 2026 to 2028 are also 2% to 4% higher than market consensus. This is primarily due to a more constructive outlook on fee income and net interest income growth. The firm also projects the statutory return on tangible equity will reach 13.6% in 2026, exceeding the company's guidance of over 12%.

Goldman Sachs noted that Standard Chartered's statutory operating income for the second quarter is expected to be approximately $5.6 billion, representing a 2% year-on-year increase, with corporate and investment banking income showing strong growth of 4%.

Second-quarter net interest income is forecast to be around $2.9 billion, which is 2% above market expectations, showing a slight sequential improvement. This is partly attributed to rising Hong Kong Interbank Offered Rates during the quarter and the higher number of days in Q2.

Regarding asset quality, the firm has lowered its credit cost forecast. It anticipates Q2 credit impairments of about $220 million, which is 11% below consensus expectations, and projects the full-year credit cost ratio to be 32 basis points, lower than the market consensus.

Additionally, Goldman Sachs expects Standard Chartered to announce a share buyback program of approximately $1 billion alongside its Q2 results, bringing the total buyback size for the 2026 fiscal year to around $2.5 billion.