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HSBC Holdings (GB:HSBA)
LSE:HSBA

HSBC Holdings (HSBA) AI Stock Analysis

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GB

HSBC Holdings

(LSE:HSBA)

Rating:82Outperform
Price Target:
1,015.00p
▲(15.93%Upside)
HSBC's overall stock score is driven by its strong financial performance and positive earnings call sentiment. The solid valuation with a low P/E ratio and attractive dividend yield further enhances the score. Technical indicators suggest a stable trend, aligning with the company's strategic initiatives and shareholder return commitments.
Positive Factors
Analyst Recommendation
Analysts maintain a 'Buy' recommendation for HSBC, indicating confidence in the company's overall financial health and future prospects.
Financial Performance
HSBC shared a significant profit from BoCom in 2024, which supports its financial performance.
Negative Factors
Potential Dilution Loss
The potential dilution loss from BoCom's recapitalization is estimated at USD0.8-1.7bn for HSBC, which counts as a notable item.
Revenue Growth Concerns
The time lag between revenue lost and revenue generated could be longer, potentially resulting in a pinch point in 2025.

HSBC Holdings (HSBA) vs. iShares MSCI United Kingdom ETF (EWC)

HSBC Holdings Business Overview & Revenue Model

Company DescriptionHSBC Holdings plc, headquartered in London, is one of the world's largest banking and financial services organizations. The company operates through multiple segments, including Retail Banking and Wealth Management, Commercial Banking, Global Banking and Markets, and Global Private Banking. HSBC serves millions of customers worldwide, offering a comprehensive range of financial services such as personal banking, corporate banking, investment banking, wealth management, and global markets solutions.
How the Company Makes MoneyHSBC generates revenue through a diversified business model that includes interest income from loans and mortgages, fees and commissions from various banking services, and trading and investment income. Key revenue streams include retail banking services like personal loans, mortgages, and credit cards, as well as commercial banking services such as corporate lending and trade finance. Global Banking and Markets contribute significantly through advisory, underwriting, and trading services across various asset classes. HSBC also benefits from wealth and asset management services, providing investment solutions and financial planning for individuals and institutions. The bank's extensive international presence and strategic partnerships enable it to capitalize on cross-border transactions and global economic activities, further enhancing its revenue potential.

HSBC Holdings Earnings Call Summary

Earnings Call Date:Apr 29, 2025
(Q1-2025)
|
% Change Since: 5.96%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Positive
The earnings call presented a predominantly positive outlook with strong financial performance and strategic growth in key areas like wealth management and transaction banking. However, the bank faces challenges due to an uncertain macroeconomic environment, potential impacts from tariffs, and specific accounting impacts related to BoCom. Despite these challenges, the bank remains confident in achieving its financial targets.
Q1-2025 Updates
Positive Updates
Strong Financial Performance
Profit before tax increased by 11%, with an annualized return on tangible equity of 18.4%, excluding notable items.
Wealth Management Growth
Fifth consecutive quarter of double-digit growth in wealth, with $22 billion in net new invested assets and 300,000 new-to-bank customers in Hong Kong.
Shareholder Returns
Announced an up to $3 billion share buyback and a $0.10 per share interim dividend, reflecting ongoing capital returns to investors.
Transaction Banking Success
Strong performance in FX and equities trading, benefiting from higher volatility and increased client activity.
Resilience and Confidence
Despite an uncertain macroeconomic environment, the bank reaffirmed its confidence in achieving mid-teens return on tangible equity for 2025, 2026, and 2027.
Negative Updates
Uncertain Macroeconomic Environment
External environment is less favorable and more uncertain due to trade policy uncertainties, potentially impacting business confidence and investment.
Potential Impact of Tariffs
A plausible downside tariff scenario could have a low single-digit percentage impact on group revenues.
Economic Uncertainty Provisions
An ECL charge of $0.9 billion was recorded, including a $150 million provision for heightened economic uncertainty.
BoCom Dilution Impact
Expected to recognize an accounting impact dilution loss of between $1.2 billion and $1.6 billion on the BoCom stake.
Company Guidance
During the first quarter of 2025, HSBC Holdings plc reported strong financial performance, with profit before tax up 11% and an annualized return on tangible equity of 18.4%, excluding notable items. The bank achieved significant growth in wealth, attracting net new invested assets of $22 billion, and increased its customer base by 300,000 in Hong Kong. HSBC also saw robust results in Transaction Banking, driven by heightened client activity in FX and equities amid market volatility. Despite a challenging macroeconomic environment, the bank reaffirmed its mid-teens return on tangible equity target for 2025-2027 and announced a $3 billion share buyback and a $0.10 per share interim dividend. Cost management remained disciplined, with a focus on achieving $0.3 billion in simplification savings this year. Additionally, HSBC's CET1 ratio stood at 14.7%, reflecting a stable capital position amidst ongoing strategic cost reallocations and external economic uncertainties.

HSBC Holdings Financial Statement Overview

Summary
HSBC demonstrates strong financial performance with consistent revenue growth and robust profitability. The company maintains financial stability with minimal leverage and solid cash flow generation, though some equity volatility is noted.
Income Statement
85
Very Positive
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
78
Positive
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
82
Very Positive
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue71.90B67.40B63.02B76.17B73.95B63.22B
Gross Profit65.73B61.25B56.35B67.01B64.24B63.22B
EBITDA20.17B36.39B33.81B20.91B23.19B0.00
Net Income20.72B23.98B23.53B15.56B13.92B5.23B
Balance Sheet
Total Assets3.05T3.02T3.04T2.97T2.96T2.98T
Cash, Cash Equivalents and Short-Term Investments254.66B821.55B307.03B350.05B407.15B308.57B
Total Debt474.52B242.35B235.16B100.44B99.04B117.44B
Total Liabilities2.86T2.82T2.85T2.77T99.04B117.44B
Stockholders Equity190.81B184.97B185.33B187.48B198.25B196.44B
Cash Flow
Free Cash Flow0.0061.42B35.42B22.02B100.75B178.71B
Operating Cash Flow0.0065.31B39.11B26.43B104.31B182.22B
Investing Cash Flow0.00-76.56B-62.91B-34.48B27.54B-22.43B
Financing Cash Flow0.0017.78B-17.56B-6.29B-10.79B-4.64B

HSBC Holdings Technical Analysis

Technical Analysis Sentiment
Positive
Last Price875.50
Price Trends
50DMA
855.79
Positive
100DMA
842.81
Positive
200DMA
760.85
Positive
Market Momentum
MACD
4.37
Positive
RSI
52.48
Neutral
STOCH
75.26
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 875.5 is above the 20-day moving average (MA) of 874.36, above the 50-day MA of 855.79, and above the 200-day MA of 760.85, indicating a bullish trend. The MACD of 4.37 indicates Positive momentum. The RSI at 52.48 is Neutral, neither overbought nor oversold. The STOCH value of 75.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:HSBA.

HSBC Holdings Risk Analysis

HSBC Holdings disclosed 36 risk factors in its most recent earnings report. HSBC Holdings reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

HSBC Holdings Peers Comparison

Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
82
Outperform
£155.55B10.4210.86%3.31%-3.40%-7.51%
79
Outperform
£47.01B8.629.38%2.47%9.76%46.29%
77
Outperform
$27.55B10.048.79%2.68%2.10%30.22%
GBNWG
75
Outperform
£40.78B8.6913.72%4.53%11.05%29.58%
75
Outperform
£45.54B12.218.75%5.58%-4.18%-16.04%
74
Outperform
£56.32B83.102.93%1.22%6.19%-13.58%
58
Neutral
$12.61B5.00-2.71%5.42%5.88%-56.09%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GB:HSBA
HSBC Holdings
875.50
252.28
40.48%
GB:STAN
Standard Chartered
1,186.00
483.03
68.71%
GB:LSEG
London Stock Exchange
10,655.00
1,366.72
14.71%
GB:NWG
NatWest Group
500.20
204.63
69.23%
GB:BARC
Barclays
331.20
128.70
63.56%
GB:LLOY
Lloyds Banking
75.76
23.76
45.69%

HSBC Holdings Corporate Events

Stock Buyback
HSBC Executes Major Share Buy-back
Neutral
May 9, 2025

HSBC Holdings PLC announced the repurchase and cancellation of a significant number of its ordinary shares as part of its buy-back program. The company purchased over 7.5 million shares across UK and Hong Kong exchanges, with a total buy-back since May 6 amounting to approximately US$264.4 million. This move is expected to impact the company’s share capital structure and could influence shareholder interests and market perceptions.

Executive/Board ChangesBusiness Operations and Strategy
HSBC Announces Long-Term Incentive Awards for Executives
Neutral
May 9, 2025

HSBC Holdings announced long-term incentive awards for its Executive Directors as part of their variable pay for the performance year ending December 2024. These awards, which consist of shares in the company, will vest over a period of five years starting in 2028, subject to performance assessments. The awards aim to align executive compensation with the company’s long-term performance goals, potentially impacting the company’s operational strategies and stakeholder interests.

Business Operations and StrategyRegulatory Filings and Compliance
HSBC Announces Conditional Share Awards to Key Personnel
Neutral
May 9, 2025

HSBC Holdings PLC announced the grant of conditional awards to its directors, employees, and former employees, allowing them to subscribe for a total of 2,936,123 ordinary shares under the HSBC Share Plan 2011. These awards are part of the company’s long-term incentive plan, with specific performance targets and clawback policies in place. The grants aim to align the interests of the grantees with the company’s strategic goals, potentially impacting the company’s operations by motivating key personnel and ensuring regulatory compliance.

Stock BuybackBusiness Operations and Strategy
HSBC Executes Share Buy-Back to Enhance Shareholder Value
Positive
May 8, 2025

HSBC Holdings PLC has executed a share buy-back, purchasing 12,166,047 of its ordinary shares from Morgan Stanley as part of its ongoing buy-back program announced on 6 May 2025. This move, involving transactions on both the London and Hong Kong Stock Exchanges, is part of HSBC’s strategy to optimize its capital structure and enhance shareholder value. The repurchased shares will be canceled, reducing the total number of shares in circulation and potentially increasing the value of remaining shares. The total consideration for the repurchase is approximately US$179.7 million, reflecting HSBC’s commitment to returning capital to shareholders.

Stock Buyback
HSBC Executes Share Buy-Back to Enhance Capital Structure
Positive
May 7, 2025

HSBC Holdings plc announced the purchase and cancellation of 3,869,057 of its ordinary shares as part of a buy-back program initiated on May 6, 2025. This move, involving transactions on both the London and Hong Kong stock exchanges, aims to optimize the company’s capital structure and enhance shareholder value. The total consideration for the repurchased shares is approximately US$43.6 million, and the company’s issued ordinary share capital now consists of 17,652,772,280 shares with voting rights.

Delistings and Listing ChangesStock Buyback
HSBC Cancels Over 18 Million Shares, Updates Voting Rights
Neutral
May 6, 2025

HSBC Holdings PLC announced the cancellation of 18,027,600 ordinary shares, which were previously repurchased on the Hong Kong Stock Exchange. This action reduces the total number of ordinary shares in issue to 17,655,082,392, which is now the total number of voting rights. This update is significant for shareholders as it affects the calculation of their interest in the company under regulatory guidelines.

Stock Buyback
HSBC Announces $3 Billion Share Buy-Back Program
Positive
May 6, 2025

HSBC Holdings plc has announced a share buy-back program to repurchase up to US$3 billion of its ordinary shares, aiming to reduce the number of outstanding shares. The buy-back will be facilitated through non-discretionary agreements with Morgan Stanley, who will independently execute the purchases on various stock exchanges, including the London Stock Exchange and the Hong Kong Stock Exchange. This strategic move is expected to enhance shareholder value and reflects HSBC’s strong financial position and commitment to returning capital to shareholders.

Shareholder MeetingsBusiness Operations and Strategy
HSBC Holdings Announces 2025 AGM Results
Neutral
May 2, 2025

HSBC Holdings PLC announced the results of its 2025 Annual General Meeting, where the majority of resolutions were passed, including both ordinary and special resolutions. Notably, the shareholder-requisitioned resolution 20 did not pass, aligning with the Board’s recommendation. The AGM results reflect the company’s strategic decisions and governance practices, potentially impacting its operational and market strategies.

Shareholder MeetingsStock BuybackDividendsBusiness Operations and StrategyFinancial Disclosures
HSBC Celebrates 160 Years with Record Profits and Strong Shareholder Returns
Positive
May 2, 2025

At its Annual General Meeting, HSBC Holdings PLC celebrated its 160th anniversary and reported record financial results for 2024, with a profit before tax of $32.3 billion and a return on tangible equity of 14.6%. The company rewarded shareholders with $26.9 billion in returns, including dividends and share buy-backs. HSBC’s strategy focuses on geographic and business diversification, and it aims to maintain strong dividend payouts and a mid-teens return on equity in the coming years. Despite global economic uncertainties, HSBC is confident in its ability to deliver healthy returns and capitalize on international trade opportunities. The bank is also committed to sustainability, aiming to become a net-zero bank by 2050 and facilitating $400 billion in sustainable financing since 2020.

Executive/Board Changes
HSBC Announces Group Chairman Succession Plan
Neutral
May 1, 2025

HSBC Holdings plc has announced that Sir Mark Tucker will retire as Group Chairman before the end of 2025. The Board has initiated a succession process, led by Ann Godbehere, to find his replacement. Sir Mark has been praised for his strategic guidance and leadership, particularly through the COVID-19 pandemic and the Group CEO succession process. He will remain as a strategic adviser during the transition. This change marks a significant moment for HSBC as it continues its development and growth under the leadership of Group CEO Georges Elhedery.

Stock BuybackBusiness Operations and Strategy
HSBC Executes Share Buy-Back to Optimize Capital Structure
Neutral
Apr 4, 2025

HSBC Holdings PLC announced the purchase and cancellation of 1.9 million of its ordinary shares as part of a buy-back program initiated in February 2025. This move, conducted through UK venues, is part of a broader strategy to manage the company’s share capital, having repurchased over 149 million shares for approximately $1.693 billion. The cancellation of these shares will adjust the company’s issued ordinary share capital, impacting shareholder calculations under regulatory guidelines.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jun 13, 2025