HSBC Holdings (HSBA) AI Stock Analysis

• Market Cap: £147.04B
• Dividend Yield: 6.02%
• Average Volume (3M): 30.61M
• Price to Earnings (P/E): 9.8
• Beta (1Y): 1.32
• Revenue Growth: -3.40%
• EPS Growth: -7.51%
• Country: UK
• Employees: 211,304
• Sector: Financial
• Sector Strength: 87
• Industry: Banks - Diversified
• EPS (TTM): 0.85
• Shares Outstanding: 17,673,110,000
• 10 Day Avg. Volume: 25,636,275
• 30 Day Avg. Volume: 30,613,663
• PEG Ratio: 1.57
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.99
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 4.33
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: £948.57
• Price Target Upside: 14.01% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12

HSBC's strong financial performance and strategic initiatives, including share buybacks and solid earnings, are significant strengths. The stock's valuation is attractive, with a low P/E ratio and high dividend yield. Technical indicators suggest stability but caution due to potential overbought conditions. Overall, HSBC is well-positioned within the banking sector, despite some macroeconomic uncertainties.

Positive Factors

Analyst confidence

Analysts maintain a 'Buy' recommendation for HSBC, indicating confidence in the company's overall financial health and future prospects.

Financial stability

No material impact on HSBC's capital and distribution capacity is expected from the potential dilution loss due to BoCom's recapitalization.

Profit contribution

HSBC shared USD2.2bn profit from BoCom in 2024, accounting for 6.8% of its profit before tax, indicating a significant contribution.

Revenue growth potential

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

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 generation challenges

The time lag between revenue lost and revenue generated could be longer, potentially resulting in a pinch point in 2025.

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

HSBC Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 832.00
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 832 is above the 20-day moving average (MA) of 797.38, below the 50-day MA of 852.06, and above the 200-day MA of 750.23, indicating a neutral trend. The MACD of -2.20 indicates Negative momentum. The RSI at 52.36 is Neutral, neither overbought nor oversold. The STOCH value of 81.72 is Negative, 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	82 Outperform	£147.04B	9.78	10.33%	6.02%	-3.40%	-7.51%
LLOY	77 Outperform	£43.97B	11.65	9.84%	3.96%	31.97%	-21.96%
BARC	75 Outperform	£42.11B	8.19	9.03%	2.82%	5.56%	31.39%
NWG	73 Outperform	£38.58B	8.94	13.18%	4.43%	15.69%	11.47%
MTRO	68 Neutral	£677.04M	15.92	3.67%	―	-11.82%	-54.07%
Sector *	63 Neutral	$12.46B	9.55	8.14%	17103.96%	12.70%	-4.66%

HSBC Holdings Corporate Events

HSBC Executes Share Buy-Back to Optimize Capital Structure

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.

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.