HSBC Holdings (HSBA) AI Stock Analysis

• Market Cap: £156.54B
• Dividend Yield: 5.49%
• Average Volume (3M): 31.33M
• Price to Earnings (P/E): 9.0
• Beta (1Y): 1.09
• Revenue Growth: 3.98%
• EPS Growth: 5.43%
• Country: UK
• Employees: 211,304
• Sector: Financial
• Sector Strength: 84
• Industry: Banks - Diversified
• EPS (TTM): 0.97
• Shares Outstanding: 17,756,406,000
• 10 Day Avg. Volume: 31,005,367
• 30 Day Avg. Volume: 31,332,372
• PEG Ratio: 1.66
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.80
• Price to Cash Flow (P/CF): 2.60
• P/FCF Ratio: 1.80
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: 1,010.05p
• Price Target Upside: 13.92% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

HSBC's strong financial performance and strategic growth initiatives, particularly in wealth management, are key strengths. The technical indicators suggest positive momentum, and the stock is attractively valued with a high dividend yield. While the cost of simplification and external market challenges present risks, the overall outlook remains positive given the bank's robust operational and strategic positioning.

Positive Factors

Financial Performance

HSBC reported 4Q24 underlying PBT of $7.3bn, which was c.9% (or c.$600m) above consensus, driven by higher income (+4%) – with beats spread across Banking NII (3% ahead) and fee and other income (5% ahead).

Revenue Growth

There is upside potential to revenue from cost redeployment, which could drive 2027e ROTE to >17%.

Shareholder Returns

The company announced a new $2bn share buyback, in-line, with the dividend at $0.36.

Negative Factors

Capital Estimates

CET1 was 14.9%, 10bp below consensus driven by FX and OCI.

Cost Concerns

The reallocation is not expected to generate material net cost reduction.

Provisions Impact

Provisions were 27/30% higher vs MSe/consensus, driven by two large ticket items in Mainland China and one in the UK.

HSBC Holdings Business Overview & Revenue Model

Company Description

HSBC Holdings plc provides banking and financial services worldwide. The company operates through Wealth and Personal Banking, Commercial Banking, and Global Banking and Markets segments. The Wealth and Personal Banking segment offers retail banking and wealth products, including current and savings accounts, mortgages and personal loans, credit and debit cards, and local and international payment services; and wealth management services comprising insurance and investment products, global asset management services, investment management, and private wealth solutions. This segment serves personal banking and high net worth individuals. The Commercial Banking segment provides credit and lending, treasury management, payment, cash management, commercial insurance, and investment services; commercial cards; international trade and receivables finance services; foreign exchange products; capital raising services on debt and equity markets; and advisory services. It serves small and medium sized enterprises, mid-market enterprises, and corporates. The Global Banking and Markets segment offers financing, advisory, and transaction services; and credit, rates, foreign exchange, equities, money markets, and securities services; and engages in principal investment activities. It serves government, corporate and institutional clients, and private investors. HSBC Holdings plc was founded in 1865 and is headquartered in London, the United Kingdom.

How the Company Makes Money

HSBC makes money primarily through its diverse range of banking and financial services. The company's revenue streams are largely derived from net interest income, which is the difference between the interest earned on loans and the interest paid on deposits. Additionally, HSBC generates significant revenue through fees and commissions from services such as wealth management, investment banking, and transaction processing. Global banking and markets also contribute to the company's earnings through trading activities, advisory services, and underwriting. The bank benefits from its expansive international presence, allowing it to capitalize on cross-border trade and investment flows. Strategic partnerships and collaborations with other financial institutions, governments, and corporations further enhance its revenue-generating capabilities. HSBC's geographic diversification, particularly its strong position in Asia, is a critical factor in its overall profitability.

HSBC Holdings Financial Statement Overview

Summary

HSBC's financial performance is strong, with consistent revenue growth, robust profitability, and solid cash flow generation. The balance sheet is stable with minimal leverage, but some volatility in equity is noted. Overall, the company's financial practices are sound, supporting growth potential within the banking sector.

Income Statement

HSBC has shown consistent revenue growth with a notable increase from the previous year, indicating positive growth trends. The gross profit margin is healthy at 100%, typical for banking as revenue equals gross profit. The net profit margin is strong, reflecting effective cost management. However, the absence of EBIT and EBITDA data limits analysis of operating efficiency.

Balance Sheet

The company maintains a strong equity position with a high equity ratio, indicating financial stability. There is no reported debt in the latest year, reducing financial leverage risks. However, fluctuations in shareholder equity and assets suggest potential volatility in financial structure.

Cash Flow

Operating cash flow is robust compared to net income, highlighting strong cash generation capabilities. Free cash flow has grown significantly, underscoring financial flexibility. The cash flow to net income ratios are favorable, indicating efficient cash usage to support operations.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
66.98B	67.61B	63.02B	67.01B	64.24B	63.22B
	Gross Profit
62.91B	67.61B	63.02B	67.01B	64.24B	63.22B
	EBIT
29.29B	0.00	26.11B	39.34B	18.13B	7.91B
	EBITDA
146.00M	0.00	0.00	0.00	0.00	0.00
	Net Income Common Stockholders
23.14B	23.98B	23.53B	15.56B	13.92B	5.23B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
172.73B	284.51B	307.03B	350.05B	407.15B	308.57B
	Total Assets
2.66T	3.02T	3.04T	2.97T	2.96T	2.98T
	Total Debt
99.04B	0.00	235.16B	100.44B	99.04B	117.44B
	Net Debt
-73.69B	-284.51B	-299.57B	-233.86B	-308.11B	-191.13B
	Total Liabilities
2.46T	2.82T	2.85T	2.77T	99.04B	117.44B
	Stockholders Equity
188.36B	184.97B	185.33B	187.48B	198.25B	196.44B
Cash Flow		Free Cash Flow
0.00	61.42B	35.42B	22.02B	100.75B	178.71B
	Operating Cash Flow
0.00	65.31B	39.11B	26.43B	104.31B	182.22B
	Investing Cash Flow
0.00	-76.56B	-62.91B	-34.48B	27.54B	-22.43B
	Financing Cash Flow
0.00	-26.46B	-17.56B	-6.29B	-10.79B	-4.64B

HSBC Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 886.60
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:HSBA, the sentiment is Positive. The current price of 886.6 is below the 20-day moving average (MA) of 889.05, above the 50-day MA of 863.66, and above the 200-day MA of 731.53, indicating a neutral trend. The MACD of 3.69 indicates Positive momentum. The RSI at 53.24 is Neutral, neither overbought nor oversold. The STOCH value of 71.81 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:HSBA.

HSBC Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HSBA	80 Outperform	£156.54B	9.02	13.62%	5.49%	3.98%	5.43%
BARC	78 Outperform	£42.62B	8.26	9.03%	2.82%	5.56%	31.39%
LLOY	72 Outperform	£42.64B	11.22	9.84%	4.11%	31.97%	-21.96%
NWG	71 Outperform	£37.25B	8.56	13.18%	3.82%	15.69%	11.47%
Sector *	64 Neutral	$14.46B	10.12	8.75%	4.25%	17.00%	-11.86%

HSBC Holdings Corporate Events

HSBC Executes Strategic Share Buy-Back to Enhance Shareholder Value

HSBC Holdings has announced the repurchase and cancellation of 3,793,287 ordinary shares, valued at approximately US$42.3 million, as part of its previously announced buy-back program. This strategic move, involving transactions on both the London and Hong Kong Stock Exchanges, aims to optimize capital structure and enhance shareholder value, impacting the total voting rights and share capital of the company.

HSBC Publishes New Base Prospectus Supplement

HSBC Holdings plc has announced the approval and publication of a base prospectus supplement by the Financial Conduct Authority. This document, which updates the base prospectus from March 2024 and its subsequent supplements, is now available for investors to view online. The publication of this supplement is an important step in HSBC’s financial operations, potentially impacting its market positioning and providing stakeholders with updated financial information.

HSBC Holdings Releases 2024 Annual Report

HSBC Holdings plc has released its 2024 Annual Report on Form 20-F, which has been filed with the US Securities and Exchange Commission. This document is now accessible on the company’s website and has also been submitted to the National Storage Mechanism for public inspection, reflecting the company’s commitment to transparency and regulatory compliance.

HSBC Announces $2 Billion Share Buy-Back Program

HSBC Holdings plc announced a share buy-back program to reduce its outstanding ordinary shares, with a maximum expenditure of US$2 billion. The buy-back, facilitated through Merrill Lynch International, will occur on various stock exchanges including the London Stock Exchange and the Hong Kong Stock Exchange, with the repurchased shares set to be cancelled, marking a strategic move to optimize shareholder value.

HSBC Submits 2024 Annual Report for Inspection

HSBC Holdings plc has submitted its Annual Report for the year ending December 31, 2024, to the National Storage Mechanism. The report, which will soon be available online, provides the required regulated information and will be mailed in hard copy to shareholders who have requested it, reflecting the company’s commitment to transparency and regulatory compliance.

HSBC Holdings Reports Strong 2024 Financial Performance Amid Strategic Restructuring

HSBC Holdings reported a strong financial performance for 2024, with profit before tax increasing by $2.0 billion to $32.3 billion, driven by strategic business disposals and revenue growth in key segments like Wealth and Personal Banking. The company continues to focus on strategic simplification and cost management, aiming for sustainable growth and returns, despite challenges such as decreased net interest income and increased operating expenses. HSBC’s strategic moves, including business disposals and restructuring, are set to enhance its market positioning, with a focus on growth areas and maintaining strong capital ratios.

HSBC Adjusts Capital Recognition for Legacy Debt Securities

HSBC Holdings plc has announced that it will no longer recognize certain legacy New York law-governed subordinated and senior debt securities as part of its tier 2 capital instruments for UK CRR purposes, nor towards its minimum requirement for own funds and eligible liabilities (MREL). This decision is aimed at maintaining the eligibility of HSBC’s other non-legacy tier 2 securities and aligning with the Bank of England’s policies on securities without a CROB clause. The move would have decreased HSBC’s MREL by 54 basis points and its total capital ratio by 46 basis points had it been implemented at the end of 2024, though it has no impact on the total capital ratio excluding transitional arrangements.

HSBC Holdings to Present 2024 Annual Results in Investor Meeting

HSBC Holdings announced an investor and analyst Zoom meeting for February 19th, 2025, featuring presentations from Group Chief Executive Georges Elhedery and Group Chief Financial Officer Pam Kaur. This meeting is part of HSBC’s annual results presentation for 2024, highlighting the company’s performance and strategic direction, which could influence its market positioning and stakeholder interests.

HSBC Executes Share Cancellation as Part of Capital Management

HSBC Holdings PLC announced the cancellation of 10,868,800 ordinary shares that were previously repurchased on the Hong Kong Stock Exchange. This reduction brings the company’s total number of voting shares to 17,824,985,413, impacting shareholder calculations under various financial regulations. The move is part of HSBC’s ongoing capital management strategy, which can influence its market positioning by potentially altering shareholder composition and voting rights.

HSBC Updates Share Capital and Voting Rights

HSBC Holdings PLC has announced that its issued share capital as of January 30, 2025, consists of 17,855,015,813 ordinary shares, with no shares held in treasury. This update is significant for shareholders as it determines the total number of voting rights, which is essential for complying with disclosure and transparency rules set by the UK Financial Conduct Authority and the Hong Kong Securities and Futures Ordinance.

HSBC Enhances Shareholder Value with Continued Share Buy-Back

HSBC Holdings plc announced the purchase and cancellation of 463,374 ordinary shares from the London Stock Exchange and 832,000 ordinary shares from the Hong Kong Stock Exchange as part of its ongoing share buy-back program. The cumulative repurchase since October totals 211.7 million shares for approximately $1.959 billion, which reduces the company’s share capital and potentially enhances shareholder value by increasing earnings per share.