SBI Stock Target: Morgan Stanley, JPMorgan, and Others’ View After Mixed Q4 Results

Synopsis: The share of this bank saw mixed broker views after Q4 FY26, with strong loan growth and stable asset quality offset by margin pressure and weaker net interest income performance.

The shares of this company, which offers retail banking, corporate banking, investment banking, mortgage loans, wealth management, and insurance, came into focus today after a global brokerage gave its view on the firm’s outlook

With a market capitlization of Rs 8,98,693 crore, State Bank of India’s shares currently trade at Rs 976 per share, up 0.26 percent from its previous day’s close. The share of this company has returned 170 percent in the last five years.

Bernstein on SBI

Bernstein maintained a Market Perform rating on SBI with a target price of Rs 1,300, implying an upside of around 33.5 percent from previous close. The view reflects balanced risk-reward, supported by steady fundamentals but limited near-term re-rating catalysts despite stable operational performance.

Loan growth accelerated strongly to 17 percent YoY, reflecting an improving demand environment and sustained credit momentum across segments. This uptick supports overall business expansion and indicates healthy balance sheet growth, strengthening visibility for medium-term earnings performance despite macro uncertainties in certain lending categories.

Domestic NIM declined sharply by 18 bps QoQ to 2.93 percent, marking the steepest compression among large banks. The decline reflects margin pressure from rising funding costs and competitive pricing, highlighting near-term profitability challenges despite stable credit demand conditions.

Asset quality remained stable with GNPA improving to 1.49 percent, indicating resilient credit underwriting despite a seasonal rise in slippages. Management retained FY27 guidance of 13–15 percent loan growth, NIM above 3 percent, and credit costs below 50 bps, reinforcing a steady outlook.

BoFA on SBI

BoFA Securities maintained a Buy rating on SBI with a target price of Rs 1,200, reflecting confidence in the bank’s strong loan growth, stable asset quality, and expected improvement in earnings momentum despite near-term margin pressure.

BoFA Securities highlighted SBI’s steady earnings growth, with PAT rising 6 percent YoY, supported by healthy loan expansion and lower credit costs. However, margins remained under pressure due to repo-linked loan repricing and MCLR adjustments following recent rate cuts.

SBI’s management guidance remains constructive, targeting 13–15 percent loan growth, NIM above 3 percent, and RoA above 1 percent for FY27. However, weaker non-interest income continues to limit earnings momentum, partially offsetting strong balance sheet growth visibility.

CLSA on SBI

CLSA maintained an Outperform rating on State Bank of India with a target price of Rs 1,275, highlighting strong loan growth and resilient asset quality. However, margin pressure from NIM compression remains a key near-term concern despite stable credit costs.

State Bank of India delivered a mixed but stable performance, with profit before tax beating estimates by 4 percent, mainly supported by lower operating expenses and controlled credit costs. However, net interest income underperformed expectations due to a sharper 17 bps QoQ compression in net interest margin.

Loan growth remained a key strength, with advances rising 17 percent YoY, reflecting strong market leadership and broad-based credit demand. Deposit growth also improved to 11 percent YoY, indicating better liability accretion and stable funding conditions, which helps support future balance sheet expansion.

Asset quality stayed resilient, with slippages steady at 0.5 percent and credit costs contained at 0.2 percent, showing strong risk management. Overall, State Bank of India continues to demonstrate operational strength despite margin pressure, with healthy growth and stable asset quality trends.

Morgan Stanley on SBI

Morgan Stanley maintained an Equal Weight rating on State Bank of India with a target price of Rs 980. The brokerage sees limited upside, reflecting balanced risk-reward amid margin pressure and moderate earnings outlook.

Morgan Stanley remains cautious on State Bank of India due to a sharp decline in net interest margin during Q4 FY26. The brokerage believes margin compression reflects ongoing stress in loan yields and funding dynamics, limiting near-term earnings visibility despite stable core lending growth.

The management, however, expects NIM to gradually recover from Q4 FY26 levels, supported by improvement in loan yields and better asset repricing. This recovery trajectory is seen as dependent on the pace of transmission in lending rates and stabilisation of deposit costs.

Despite this, Morgan Stanley has lowered its FY27 and FY28 NIM estimates by more than 20 basis points, factoring in sustained pressure on margins. Consequently, EPS forecasts were cut by 4 percent for FY27 and 2 percent for FY28, reflecting a slower earnings recovery cycle.

JPMorgan Chase on SBI

JPMorgan Chase maintained an Overweight rating on State Bank of India with a target price of Rs 1,225, indicating confidence in earnings resilience and medium-term growth despite recent margin pressure and weaker Q4 FY26 performance.

State Bank of India reported weaker-than-expected Q4 FY26 earnings, driven by slower net interest income growth of 3.8 percent YoY and margin compression. Domestic NIM declined 18 bps QoQ to 2.93 percent, coming in below Street expectations, reflecting pressure on lending yields and funding costs.

Despite pressure on margins, management remains confident of recovery in FY27, supported by corrective measures on deposits and lending mix. Asset quality stayed comfortable with credit costs at 24 bps, even as slippages saw a mild uptick, indicating stable balance sheet performance overall.

About the Company

State Bank of India is the largest public sector bank in India with a wide domestic and international presence. It offers a full range of banking and financial services including retail, corporate, and treasury operations, supported by strong asset quality, large deposit base, and extensive branch network across the country.

Financial highlights: The revenue from operations grew by 3 percent to Rs 1,31,080 crore in Q4 FY26 from Rs 1,26,840 crore in Q4 FY25, and EBIDT grew by 7 percent to Rs 56,030 crore in Q4 FY26 from Rs 52,402 crore in Q4 FY25. Accompanied by a flat net profit growth of 0 percent to Rs 20,508 crore in Q4 FY26 from Rs 20,379 crore in Q4 FY25, resulting in an EPS decline of 3 percent to Rs 21.28 per share in Q4 FY26. 

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