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HSBC Holdings Plc (HSBC)
NYSE:HSBC
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HSBC Holdings
(NYSE:HSBC)
81Outperform
HSBC Holdings (HSBC) vs. S&P 500 (SPY)
Market Cap
$194.23B
Dividend Yield5.46%
Average Volume (3M)3.43M
Price to Earnings (P/E)8.9
Beta (1Y)0.42
Revenue Growth6.79%
EPS Growth8.57%
CountryUS
Employees211,000
SectorFinancial
Sector Strength77
IndustryBanking
Share Statistics
EPS (TTM)6.19
Shares Outstanding3,560,354,700
10 Day Avg. Volume6,072,484
30 Day Avg. Volume3,428,841
Financial Highlights & Ratios
PEG Ratio1.04
Price to Book (P/B)N/A
Price to Sales (P/S)2.70
Price to Cash Flow (P/CF)2.40
P/FCF Ratio1.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$69.00Price Target Upside23.79% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
HSBC Holdings Business Overview & Revenue Model
Company DescriptionFounded in 1865, UK-based HSBC Holdings Plc provides banking and financial services. It is the largest bank in Europe and the sixth largest bank in the world by 2020. It operates through the following business segments: Retail Banking and Wealth Management, Commercial Banking, Global Banking and Markets, and Global Private Banking.
How the Company Makes MoneyHSBC makes money primarily through interest income from its wide range of lending activities, including personal loans, mortgages, and corporate loans. Additionally, the bank generates revenue from fees and commissions charged on various services such as wealth management, investment banking, and transaction processing. The bank also earns from trading and investment activities within its Global Banking and Markets division. Key revenue streams include net interest income, net fee income, and trading income. Significant partnerships with corporate clients and financial institutions, along with strategic geographical diversification, contribute to HSBC's earnings. The bank's global presence in both established and emerging markets allows it to capture diverse revenue opportunities across different economic cycles.
HSBC Holdings Financial Statement Overview
Summary
HSBC has shown strong financial health with consistent revenue growth and effective cash flow management. The absence of debt in 2024 significantly strengthens its balance sheet, although there is room for improvement in operational efficiency as indicated by the slight decrease in return on equity. The bank's ability to generate cash and manage costs remains robust, positioning it well for continued stability and growth.Income Statement
HSBC has demonstrated a strong income statement performance with consistent revenue growth, particularly from 2023 to 2024, showing a growth rate of 7.28%. The net profit margin improved slightly to 35.45% in 2024 from 37.34% in 2023, indicating efficient cost management and profitability. However, the absence of EBIT and EBITDA margins in 2024 suggests a potential need for detailed operational cost analysis.85
Very Positive
Balance Sheet
The balance sheet reflects solid financial stability with zero total debt in 2024, enhancing the debt-to-equity ratio. HSBC's equity ratio remained strong, maintaining investor confidence. However, the return on equity slightly decreased to 12.96% in 2024 from 12.70% in 2023, indicating a slight dip in efficiency in generating returns on shareholder equity.78
Positive
Cash Flow
HSBC's cash flow analysis shows robust free cash flow growth of 73.34% from 2023 to 2024, highlighting strong cash generation capabilities. The operating cash flow to net income ratio of 2.72 in 2024 signifies effective cash management. However, the free cash flow to net income ratio slightly declined from 1.50 in 2023 to 2.56 in 2024, suggesting potential reinvestment or operational changes.82
Very Positive
| 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 | -2.38B | 502.00M | 527.00 | 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 | ||||
| 305.91B | 284.51B | 307.03B | 350.05B | 407.15B | 308.57B | Total Assets |
| 3.04T | 3.02T | 3.04T | 2.97T | 2.96T | 2.98T | Total Debt |
| 235.16B | 0.00 | 235.16B | 100.44B | 99.04B | 117.44B | Net Debt |
| -70.75B | -284.51B | -299.57B | -233.86B | -308.11B | -191.13B | Total Liabilities |
| 235.16B | 2.82T | 2.85T | 2.77T | 99.04B | 117.44B | Stockholders Equity |
| 185.33B | 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
Positive
55.74
Price Trends
52.06
Positive
48.54
Positive
45.08
Positive
Market Momentum
1.41
Positive
54.22
Neutral
10.45
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HSBC, the sentiment is Positive. The current price of 55.74 is below the 20-day moving average (MA) of 56.01, above the 50-day MA of 52.06, and above the 200-day MA of 45.08, indicating a neutral trend. The MACD of 1.41 indicates Positive momentum. The RSI at 54.22 is Neutral, neither overbought nor oversold. The STOCH value of 10.45 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HSBC.
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 (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $194.23B | 8.89 | 13.74% | 5.46% | 6.79% | 8.57% | |
81 Outperform | $640.70B | 11.60 | 17.28% | 2.09% | 17.07% | 21.78% | |
74 Outperform | $221.23B | 12.54 | 10.81% | 2.30% | 7.87% | 11.69% | |
74 Outperform | $165.83B | 13.11 | 11.95% | 2.21% | 14.80% | 77.97% | |
73 Outperform | $127.20B | 11.36 | 6.04% | 3.27% | 8.20% | 49.26% | |
70 Neutral | $301.22B | 12.33 | 9.24% | 2.52% | 13.06% | 4.94% | |
64 Neutral | $13.79B | 10.52 | 9.20% | 4.24% | 17.25% | -7.60% |
* Financial Sector Average
Performance Comparison
HSBC
HSBC Holdings
55.74
21.35
62.08%
BAC
Bank of America
39.91
5.08
14.59%
C
Citigroup
67.95
12.77
23.14%
JPM
JPMorgan Chase & Co.
227.90
44.13
24.01%
WFC
Wells Fargo
68.93
12.92
23.07%
GS
Goldman Sachs Group
535.71
155.49
40.89%
HSBC Holdings Earnings Call Summary
Earnings Call Date: Feb 19, 2025 | % Change Since: 1.05% | Next Earnings Date: May 6, 2025
Earnings Call Sentiment Positive
The earnings call presented a positive outlook with record profit and robust growth in key areas like Wealth and Premier Banking, supported by strategic simplification efforts. However, the sentiment is tempered by challenges such as significant restructuring costs and an uncertain interest rate environment.Highlights
Record Profit and Shareholder Returns
HSBC reported a record profit before tax of $32.3 billion, or $34.1 billion excluding notable items, with a 14.6% return on tangible equity. The bank announced $26.9 billion in distributions to shareholders, including $0.87 per share in dividends and $11 billion in share buybacks.
Organizational Simplification and Cost Savings
HSBC implemented changes to create a more agile bank, aiming for $1.5 billion in annualized savings by the end of 2025 through role deduplication, representing an 8% reduction in global staffing costs.
Growth in Wealth and Premier Banking
International Wealth and Premier Banking reported strong performance, with a 27% increase in wealth revenues in Q4 2024. The bank added 234,000 new-to-bank Personal Banking customers in Hong Kong in Q4.
Strong Deposit and Loan Portfolio
HSBC's deposit base grew to $1.7 trillion, reflecting a strong, liquid, and profitable balance sheet. Loan growth is expected to stabilize, supported by strong customer trust and a conservative risk management approach.
Strategic Focus on High-Growth Markets
HSBC plans to focus investments on high-growth areas like Wealth in Asia and the Middle East, UK SME coverage, and wholesale transaction banking, redeploying $1.5 billion from non-strategic activities.
Lowlights
Severance and Up-Front Costs
The organizational simplification will incur approximately $1.8 billion in severance and other up-front costs by the end of 2026.
Challenges in Interest Rate Environment
The interest rate outlook remains volatile, affecting Banking NII, which is expected to be around $42 billion in 2025, reflecting adjustments to market conditions.
ECL Charges and CRE Sector Concerns
The Q4 ECL charge was $1.4 billion, with notable contributions from two clients in the UK and Mainland China. Concerns persist in the commercial real estate sector, particularly in Hong Kong and China.
Company Guidance
During HSBC Holdings plc's 2024 Annual Results call, the company provided several key metrics and guidance for the future. The Group CEO, Georges Elhedery, announced a record profit before tax of $32.3 billion for 2024, or $34.1 billion excluding notable items, achieving a return on tangible equity of 14.6% or 16% excluding notable items. They distributed $26.9 billion to shareholders, including $0.87 per share in dividends and $11 billion in share buybacks. Additionally, HSBC plans to realize $1.5 billion in annualized savings by the end of 2025 through organizational simplification, with an upfront cost of $1.8 billion. The bank aims for mid-teens return on tangible equity in 2025, 2026, and 2027 while targeting double-digit CAGR growth in its wealth business. For 2025, HSBC expects Banking NII to be around $42 billion, with a focus on strategic growth areas and efficiency improvements. The bank's CET1 ratio was 14.9%, within its target range of 14% to 14.5%.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.