The bank is benefiting from structurally higher returns in its core Asia-Middle East footprint, and a far more disciplined balance sheet than in previous cycles.

So, how high could the shares go?

What are the key growth momentum drivers?

Sustained profits underpin gains in any firm’s share price over time. In Standard Chartered’s case, the latest (Q1 2026) results showed powerful momentum across both fee‑based and interest‑based engines.

A risk here is a prolonged period of lower global interest rates that could compress margins and slow income growth. Another is a further rise in geopolitical tensions in key markets, particularly the Middle East, which may lead to higher credit‑impairment charges.

Nevertheless, operating income in Q1 rose 10% year on year to $5.9bn (£4.3bn). It was a record performance, highlighting the strength of its diversified business model.

Non‑interest income grew 16% to $3bn, driven by a 32% surge in its fee-based Wealth Solutions income. Meanwhile, net interest income edged 1% higher to $2.9bn, reflecting higher volumes in markets where interest rates remain elevated.

Profit before tax increased 17% to hit a record $2.5bn, reflecting disciplined cost control and strong activity across Global Banking. And return on tangible equity — a key profit marker for banks — rose 2.6% to 17.4%.

Together, these trends show a business generating broad‑based earnings growth that should continue to support the valuation gap ahead.

At what price ‘should’ the shares be trading?

Because price and value are very different financial concepts, a rise in a stock’s price does not mean it is left without value. Price simply reflects the level buyers and sellers are willing to deal on at a given moment. But value is determined by the underlying strength and prospects of the business itself.

Discounted cash flow (DCF) analysis allows investors to ascertain where a stock should trade by projecting future cash flows and discounting them back to the present.

The more uncertain those projections are, the higher the return investors demand, increasing the discount applied. Analysts’ DCF models differ because their assumptions vary. Using my own inputs — including an 8.3% discount rate — Standard Chartered shares appear 33% undervalued at their current £18.83 level.

That implies a fair value of £28.10. So, if markets continue drifting toward fair value, this could be a great opportunity if those DCF assumptions hold.

My investment view

My holdings in two other banking stocks — HSBC and NatWest — preclude me from buying another. To do so would unsettle the risk/reward balance of my portfolio.

However, Standard Chartered combines strong structural growth drivers with a far more disciplined balance sheet than in previous cycles. These factors give it real resilience as well as momentum.

The latest results showed a business firing on both fee‑based and interest‑based cylinders. Yet the shares still trade at a steep discount to their long‑term earnings power.

With a 33% DCF undervaluation and returns rising across its core markets, the shares look like a compelling long‑term prospect for patient investors to consider, in my view.

HSBC Holdings is an advertising partner of The Twelfth Magpie. Simon Watkins has positions in HSBC Holdings and NatWest Group Plc. The Twelfth Magpie has recommended Barclays Plc, HSBC Holdings, Lloyds Banking Group Plc, and Standard Chartered Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor and Hidden Winners. Here at The Twelfth Magpie we believe that considering a diverse range of insights makes us better investors.

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Only the day before, Lloyds Banking Group posted better-than-expected results. But the shares ended the day down 1.5%. So what’s so different about Standard Chartered? It has to be the lack of reliance on high street retail banking, with the heightened risks from inflation and interest rates that come with it.

In the words of CEO Bill Winters:

We delivered a record first quarter performance in 2026, with double digit growth in Wealth Solutions and Global Banking. Despite ongoing geopolitical tensions and global economic uncertainty, our advantaged market presence and disciplined risk management give us confidence in our ability to perform.

Full-year outlook

Despite the fallout from the Middle East conflict, the bank still kept its 2026 full-year guidance unchanged. We should expect to see operating income hit around the bottom end of a 5%–7% growth range, year on year.

Near the top end would be nicer, but even 5% against this year’s economic backdrop seems more than acceptable to me. Net interest income, however, is likely to be “broadly flat” at constant currency. So that’s something we need to keep an eye on, with a year of uncertain interest rates ahead of us.

Record quarter

Within this set of results, a few highlights caught my eye:

• Operating profit of $5.9bn, up 9%.
• Profit before tax up 17% to $2.5bn.
• Return on tangible equity (RoTE) up to 17.4%.

This record quarter comes even as Standard Chartered faced $296m in impairment charges — with $190m of that related to Middle East fallout. But compared to the profit levels we’re seeing here, I’d say those are comfortable levels.

The resilience of Standard Chartered shares shows in the above comparison with Lloyds, which is firmly at the other end of the domestic/international banking scale.

But it does come with what might be a full valuation — as forecasts suggest a price-to-earnings (P/E) ratio of 11. Does that allow enough safety room for the risks that come with so much exposure to emerging markets? I’m really not sure. And we only have fairly modest dividends to look forward to, with a 2.6% yield on the cards for 2026.

Looking forward…

As well as the profit guidance mentioned above, management expects reported costs for the full year to remain broadly flat. And we should see a statutory RoTE of “greater than 12%.” That might turn out a little disappointing if it’s too far below this quarter’s 17.4%.

So, at today’s valuation, do I rate Standard Chartered shares as something for ISA investors to consider buying? For those who can stand the potential volatility I think we could see in the short term, I’d say yes.

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These two measures — price and value — are not the same thing in stocks. The former is simply whatever the market will pay at any point, while the latter reflects the underlying business’s fundamentals.

The difference between the two is where savvy long-term investors can make big profits. This is because all asset prices, including shares, tend to converge to their ‘fair value’ over time — up or down.

How does the core business look?

Earnings are the key driver for any firm’s share price over the long run. A risk to Standard Chartered is any deterioration in the US-China relationship, as this might affect Asia’s economic growth. Another is litigation arising from compliance issues in any of its key markets. Nevertheless, analysts forecast that the bank’s earnings will rise by a yearly average of 9% over the medium term.

This looks well-founded, based on recent results, including the full-year 2025 numbers. Underlying profit before taxation rose 16% year on year to $7.9bn (£5.9bn). It highlights the bank’s ability to grow earnings across its core corporate, trade and wealth franchises rather than relying on a single cyclical tailwind.

Operating income increased 7% to $20.9bn, underlining continued momentum in its cross‑border and wealth‑led strategy. Within that, non‑interest income rose 13% to $9.7bn, illustrating the growing contribution from fee‑based businesses such as Wealth Solutions, Global Banking and Global Markets.

Meanwhile, the cost‑to‑income ratio improved by 80 basis points to 59.1%, highlighting improving operating leverage. Crucially, return on tangible equity (ROTE) — a key profitability metric for banks that signals structurally higher returns on capital — rose 300bps to 14.7%.

Are the shares undervalued?

Discounted cash flow analysis identifies the price at which any stock should trade by projecting future cash flows and ‘discounting’ them back to today.

Different analysts will reach different conclusions based on the assumptions they use and they could come up with a lower fair value than I do. But my DCF modelling (which uses an 8.4% discount rate, among other inputs) shows Standard Chartered’s shares are around 47% undervalued at the current £15.86 price.

That suggests a fair value of around £29.92 — significantly higher than where the stock trades today. The gap suggests a potentially terrific buying opportunity if those DCF assumptions prove right.

Secondary confirmations of this undervaluation are also evident in relative valuations with peers. Notably, for example, the bank’s 2.4 price-to-sales ratio is well below its competitors’ average of 3. This group comprises Barclays at 2, NatWest at 2.7, Lloyds at 3, and HSBC at 4.4.

My investment view

Standard Chartered’s shares look deeply underpriced to me relative to its improving earnings power. Double‑digit profit growth, rising ROTE and an increasingly fee‑led business mix support a sustainably higher valuation. Consequently, I think it well worth the consideration of long-term investors.

For me, owning another banking stock (I already hold HSBC and NatWest) would unbalance my portfolio’s risk/reward balance. So, I will not be buying it at the moment. But I am looking at other deeply discounted growth stocks, some with high dividend yields too.

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Its earnings are increasingly driven by fast-growing Asian and Middle Eastern wealth markets, with profits rising and capital returns accelerating.

That combination suggests the bank is moving into a new phase of growth, yet the market has not yet reflected this, in my view.

So, where should the shares be trading right now?

The engines powering growth

Ultimately, earnings (‘profits’) drive any company’s share price higher over the long run. A risk to Standard Chartered is any prolonged downturn in the global economy. This could hit its fee-based wealth market operations. Nonetheless, analysts forecast that its earnings will grow by an average 8.6% a year over the medium term at least.

This looks well-supported to me by its recent (24 February) full-year 2025 results. Operating income rose 6% year on year to $20.9bn (£15.5bn), underlining the strength of its cross-border and wealth-focused strategy.

Net interest income edged 1% higher to $11.2bn, as volume growth offset margin pressure from lower rates. Non-interest income increased 13% to $9.7bn, driven by a 24% surge in Wealth Solutions and double-digit gains in Global Banking and Global Markets.

Underlying profit before tax climbed 18% to $7.9bn, while return on tangible equity (ROTE) improved to 14.1%. Taken together, these highlight the bank’s strengthening profitability and the growing contribution from its affluent‑client franchise.

What’s the stock really worth?

Price and value are not the same thing in a stock. The former is whatever the market will pay at any point. The latter reflects the true worth of the underlying business, expressed as ‘fair value’ per share.

To gauge Standard Chartered’s ‘fair value’, I ran a discounted cash flow (DCF) analysis. This projects a company’s future cash flows and then discounts them back to today. It also reflects consensus analysts’ earnings growth forecasts for the bank.

Some analysts’ DCF modelling is more bearish than mine, depending on the inputs used. However, based on my DCF assumptions — including an 8.4% discount rate — Standard Chartered is 34% undervalued at its current £18.36 price.

Therefore, the fair value of the shares is £27.81 — considerably higher than today.

This gap between its current price and its fair value is crucial for the profits of long-term investors. This is because share prices can trade towards their fair value in the long run.

So the big gap between Standard Chartered’s price and its fair value suggests a potentially superb buying opportunity to consider today if those DCF assumptions hold.

My investment view

I already hold two banking sector stocks — HSBC and NatWest. So, owning another would disturb the risk-reward balance of my portfolio.

However, if I did not have this problem, I would buy Standard Chartered now. It is positioned strongly in a structurally advantageous franchise in the fastest-growing wealth markets in the world.

It has strong capital, rising ROTE, and a clear runway for multi-year growth in Wealth, Global Banking and Markets.

So, for other investors without my portfolio concerns, I think it well worth some attention.

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A five-year rise of 258% eclipses even NatWest‘s storming 205% over the same period. Standard’s focus is on wealth management in Asia, Africa and the Middle East. And there’s surely great promise there.

While those areas do bring geopolitical risk, wealth in the regions is rising strongly. And it helped boost underlying profit before tax by 18% in 2025 — as reported Tuesday (24 February). The final quarter did fall a little short of analyst expectations. And Standard Chartered shares lost around 1% in early trading.

New share buyback

The standout is a new share buyback, of $1.5bn — adding to $2.8bn already announced during 2025. It seems Standard Chartered is throwing off a lot of cash — and there’s enough to lift the full-year dividend by 65% too. At 61 cents (around 45.3p) per share, it means a yield of 2.5% on the previous day’s close.

That’s well below the best the FTSE 100 banks have to offer. Again, NatWest comes out on top, with a 5.3% yield on the cards. Still, there are different ways to return cash to shareholders.

Standard’s buyback approach should increase future per-share measures, like earnings. And that, in turn, can boost share prices further. Whether it’s by share price growth or by dividend income, total returns are what matter.

A cracking year

In the words of CEO Bill Winters: “2025 was another year of strong momentum. We achieved an underlying return on tangible equity of 14.7%, exceeding our three-year plan a full year early.“

The bank saw net interest income rise 1% to $11.2bn. That might not look like a big increase. But in these days of global inflation generally falling, I’d say it’s a positive sign of reliable profitability.

Over the year, Standard Chartered saw 24% growth in operating income from its Wealth Solutions division. Global Banking brought in a 15% rise over 2024 too. The focus appears to be paying off.

At the bottom line, underlying earnings per share (EPS) climbed 37% to 170p. That puts Standard Chartered shares on a trailing price-to-earnings (P/E) ratio of 10.7. Is that, perhaps, fully valued? Or is there room for more?

Next few years

The big jump in earnings per share puts that valuation below analyst expectations — they had it up around 12. What’s more, they forecast a further 15% EPS rise between now and 2027. That could drop the P/E to only a bit over nine by then, which I find attractive.

I still expect some volatility. It’s an unavoidable risk with any investment based on emerging markets.

But with the developing world hopefully pulling further away from the post-Covid economic slump, I rate Standard Chartered as one to consider for the long term.

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Following a deep restructuring, capital strengthening, and strategic refocusing, the bank outgrew this narrative. But the share price does not appear to have caught up with this reality. So how much of a bargain does the bank look right now?

Ghosts of the past

Before Bill Winters became CEO in 2015, Standard Chartered’s EM operations exposed it to geopolitical tension and recurring compliance failures. US-China relations worsened, Chinese growth slowed, and several EM currencies became highly volatile. Sanctions risks in certain markets added further pressure and damaged confidence in the bank’s controls.

However, Winters strengthened sanctions systems, enhanced regulatory monitoring, raised capital, improved core equity ratios, and reduced weaker exposures. He then pushed the bank into refocusing on fee-based rather than interest-based business, so reshaping the earnings-growth profile.

The upshot is that today’s Standard Chartered bears little resemblance to the institution that once drew market caution. Some risks remain, especially those linked to China’s relationship with the US.

Even so, consensus analysts’ forecasts indicate the bank’s earnings (profits) will grow 7.8% a year to end-2028. And it is this that drives any company’s share price over the long term.

Changes reflected in results

Its H1 2025 results, released on 31 July, reflected this business shift. The fee-based Wealth Solutions, Global Markets, and Global Banking divisions each recorded double-digit income growth. These powered a 26% year-on-year rise in underlying pre-tax profit to $4.383bn (£3.27bn), well above analysts’ $3.83bn consensus forecast.

The previous full-year 2024 results showed the same pattern as underlying pre-tax profit jumped 20% to $6.8bn. Wealth Solutions delivered a record performance, with income up 29% and net new money rising 61% to $44bn. Global Markets and Global Banking also recorded strong 15% income growth.

How undervalued is it?

In my experience as a former investment bank trader, discounted cash flow (DCF) analysis is the optimal way to ascertain a share’s true worth.

It estimates a company’s ‘fair value’ by projecting its future cash flows and then ‘discounting’ them back to today. The more uncertain those earnings are, the higher the return investors demand and the greater the discount applied.

Some analysts’ DCF modelling is more bearish than mine, and some more bullish, depending on the inputs used. However, based on my DCF assumptions — including an 8.4% discount rate — Standard Chartered is 32% at its current £18.70 price.

Therefore, its fair value could secretly be close to £27.50 a share.

My investment view

I have long wanted to buy Standard Chartered shares, but my portfolio’s risk/reward balance will still not quite allow it. I already own two bank stocks — NatWest and HSBC — so owning another would unsettle that equilibrium.

However, I believe the market still is not pricing in the bank that has emerged under Winters. Given this, and the strong earnings growth expected by analysts, I think the shares merit serious consideration from other investors.

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Yet despite last year’s impressive gains, some British blue-chips crushed the returns delivered by the broader FTSE. Take Fresnillo (LSE:FRES), Standard Chartered (LSE:STAN) and Babcock International (LSE:BAB). Their share prices soared by 83% or more over the course of last year.

But can these high-power shares repeat the trick in 2026? Could they even beat last year’s stunning returns? Let’s take a look.

Silver surge

Fresnillo was far and away the FTSE 100’s greatest performer last year. It rose by a spectacular 403%, driven by a robust year for gold and silver prices — these rose 65% and 150%, respectively.

Holding gold stocks carries greater risk than investing in physical metal itself. Production issues that can damage earnings are a constant threat to mining stocks.

But as Fresnillo shows, it can also lead to supersized gains, as producers’ profits can grow far more strongly when metal prices rise.

I’m not expecting gold and silver to rise as strongly in 2026. But I’m prepared for further significant gains, as economic and geopolitical uncertainty boosts safe-haven assets again.

I’m also predicting another tough year for the US dollar, which should drive gold and silver demand. A weaker greenback makes it even more cost effective to buy dollar-denominated assets.

Banking giant

Standard Chartered’s share price soared 83% in 2025. It may experience some bumpiness this year if China’s economy falters. But I’m still expecting another strong performance in 2026, as — broadly speaking — its Asian and African markets continue to rebound from their post-pandemic hangover.

StanChart, as it’s known, operates a wide range of product lines and across many countries. As such, it has substantial opportunities to grow profits as wealth levels in its developed regions boom.

This was illustrated in October, when the bank said it expects 2025 operating income to rise at the “upper end” of a 5% to 7% guidance range.

A cash-rich balance sheet gives it plenty of scope to invest for growth. It may also lead to more substantial share buybacks, giving the bank’s share price an added lift.

In the top 3

Babcock International was also one of the FTSE 100’s top three risers in 2025, increasing 143% in value. It took off as investors finally recognised its excellent value relative to the broader defence sector and piled in.

Despite this, Babcock shares still offer excellent value right now. This could help its share price surge again, and especially given the strong outlook for the global defence industry.

A Russia-Ukraine peace deal is welcome following years of bloody conflict. It could impact the performance of contractors like this in the near term.

But it’s unlikely to derail NATO countries’ aims to rapidly rearm amid rising concerns over Moscow’s foreign policy, along with potential Chinese expansionism. So I’m expecting Babcock’s sales (which rose 7% organically between April and September) to keep climbing.

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However, the two metrics are different, so the bullish run does not mean there’s no value is left in the stock. Price is just whatever the market will pay for a share at any given point. But value reflects the true worth of a business, based on its fundamentals.

In my experience, big profits can come from the gap between the two measures. This is because asset prices tend to converge to their true worth over time.

To ascertain if a price-to-value gap exists in Standard Chartered’s case, I re-examined the business and ran the key numbers.

A strong core business?

Ultimately, it is earnings (or profits) growth that drives any firm’s share price (and dividends) higher over the long term.

A risk comes from intense competition in the sector that may reduce its profit margins.

That said, analysts forecast that its earnings will grow by 7.6% a year to end-2027.

Its recent sets of results look to support such a view, in my opinion.

Its full-year 2024 results released on 21 February showed a 20% year-on-year jump in underlying pre-tax profit to $6.8bn (£5.2bn).

This occurred after the bank shifted its focus to fee-based rather than interest-based business following a decline in rates in several markets.

Most notable here was a record performance from its Wealth Solutions business. This saw a 29% rise in income growth and net new money increase by 61% to $44bn.

The fee-based Global Markets and the Global Banking businesses also saw strong income growth of 15%.

The H1 2025 results, released on 31 July, told the same story. Wealth Solutions, Global Markets, and Global Banking divisions each recorded double-digit income growth.  

These in turn powered a 26% rise in underlying pre-tax profit to $4.383bn, far outstripping analysts’ forecasts of $3.83bn.

What’s the bank’s outlook?

On 30 October, the bank’s Q3 results were released, which saw underlying pre-tax profit jump 10% to $1.985bn.

Fee-based business grew by 12%, driven by Wealth Solutions and Global Banking.

Standard Chartered now expects that it will reach its goal of a 13% return on tangible equity (ROTE) this year. Previously, it had not expected to do so until the end of 2026.

Like return on equity, ROTE is calculated by dividing the company’s net income by average shareholders’ equity. However, ROTE excludes intangible elements such as goodwill.

The price-to-value gap

In my opinion, the best way to ascertain the true value of any stock is through discounted cash flow analysis.

It clearly identifies the price at which any share should trade, based on cash flow forecasts for the underlying business.

In Standard Chartered’s case, it shows the shares are 32% undervalued at their current £15.62 price.

The result is a fair value figure of £22.97.

I already hold two banking stocks – HSBC and NatWest – so owning another would upset the risk-reward balance of my portfolio.

That said, given its strong earnings growth prospects and deep undervaluation, I think the stock is a bargain worthy of other investors’ consideration.

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But ignoring Standard Chartered means turning up our noses at a 215% share price gain over the past five years. And it’s up 60% in 2025 alone. Let’s see what third-quarter results tell us.

Hitting targets

In a 30 October update, CEO Bill Winters said: “We now expect to deliver an underlying return on tangible equity of around 13% in 2025, hitting our target a year earlier than planned.”

Operating income rose 5% from the same quarter a year ago, to $5.1bn. Net interest income dipped 1% to $2.7bn. But that seems like a solid performance to me, considering global interest rates have mostly fallen in the past 12 months.

For me, liquidity is a crunch measure when it comes to valuing bank shares. It’s what brought the world’s banking system to its knees in the 2008 financial crisis, after all.

On that score, a Common Equity Tier 1 (CET1) ratio of 14.2% looks very healthy to me. It’s a measure of a bank’s highest-quality capital which is relatively quickly accessible, compared to total risk-weighted assets.

Cash cow?

Dividends are modest by FTSE 100 bank sector standards, with a forecast yield of only 2%. And that’s going to keep away some investors. But Standard Chartered has been repurchasing its own shares too, which should boost future per-share earnings and dividends.

The bank is part-way through a $1.3bn buyback announced in July. Oh, and that strong CET1 ratio allows for the completion of the entire buyback, even though we were only at the $413m mark on results day on 30 September. So the bank seems to be a bit healthier than that figures suggests.

The big question is whether we’ve missed the boat, or does the Standard Chartered share price still make it one to consider for the long term?

Corporate risk

I think we do need to look at the different risks involved in retail and corporate banking. Corporate banking failures drove the 2008 crash. The way investments in that world can be chopped, changed, repackaged and sold on hid an insidiously creeping crunch in liquidity that with hindsight seemed inevitable.

Can we be sure the lessons have been learned and the banking system won’t stretch to breaking point again? We can’t be sure, no. And whether we’ll see something similar again is a definite maybe. The risk is far from over.

We do have much tighter liquidity regulations these days… but the Trump administration seems keen to unwind them.

Bottom line

For me though, corporate banking risk lies hand in hand with profit opportunities. The shares are on a forward price-to-earnings (P/E) ratio of 11, dropping to eight based on 2027 forecasts. At that valuation, Standard Chartered could be one to consider for the long term.

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Clearly, that’s a very strong return over a short period of time. And investors will have received dividends during that period.

However, it’s worth noting that while I’ve generally been rather bullish on the bank, there was one point when I was a little nervous.

With Donald Trump back in the White House, his renewed push for tariffs — particularly around the so-called Liberation Day — made me uneasy about Standard Chartered’s heavy exposure to developing markets.

The bank’s growth depends on trade flows across Asia, Africa, and the Middle East, and any escalation in protectionism threatens to slow those economies.

Among other things, I was worried that these tariffs could disrupt supply chains, weaken export revenues, and dampen credit demand in key regions. And it did seem for a while that some of Standard Chartered’s key markets were the focus of Trump’s ire.

Despite these concerns, the bank’s share price has gone from strength to strength. Worries about bad credit exposure and falling demand appear to have been misplaced.

That doesn’t mean it won’t be an issue in the future — the full impact of Trump’s trade policies may not be perfectly understood for some time.

What does the valuation tell us?

Standard Chartered’s valuation looks reasonable given its earnings trajectory, though it’s not especially cheap compared to peers.

Based on current estimates, the bank trades on a forward price-to-earnings (P/E) ratio of around 10.2 times for 2025. This falls to 9.3 times for 2026, and 7.5 times for 2027. That implies analysts expect strong earnings growth. Earnings per share are forecast to rise from $1.87 in 2025 to $2.54 by 2027.

The dividend yield is expected to remain moderate, at 2.3% in 2025, 2.6% in 2026, and 2.9% in 2027.

While the payout ratio stays below 25%, the prospective yield is lower than that of Lloyds, which offers a more generous return to shareholders.

Still, the valuation multiples reflect Standard Chartered’s emerging markets bias — higher growth potential but also higher perceived risk.

The shares trade below book value for much of the forecast horizon, suggesting lingering investor caution.

Although the earnings outlook is encouraging, with forecast profit growth outpacing many UK-listed peers, the income case is less compelling. Overall, the stock appears attractively valued for growth-oriented investors, but less so for those prioritising income in the near term.

The bottom line

It’s certainly worth considering, and it’s also worthwhile given that Standard Chartered could outperform UK-focused banks like Lloyds beyond the forecast period.

Personally, my favourite in the sector to add to a watchlist is currently Arbuthnot. It’s hard to compare as Arbuthnot is much smaller.

However, the value proposition of Arbuthnot is stronger than its FTSE 100 peers. Size accounts for some of that, but not all.

Arbuthnot’s edge lies in its ability to grow lending prudently and its high-wealth clientele — typically more resilient in economic downturns.

While its smaller size is a risk, its private and commercial banking focus captures clients often under-served by larger peers, while its low loan-to-deposit ratio supports stability.

That combination could drive outperformance relative to its current valuation.

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