HSBC Holdings (HSBC) AI Stock Analysis

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HSBC Holdings

(NYSE:HSBC)

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Outperform 81 (OpenAI - 4o)

Rating:81Outperform

Price Target:

$74.00

▲(5.88% Upside)

HSBC's strong financial performance, positive earnings call, and reasonable valuation contribute significantly to its overall score. The technical analysis supports a bullish outlook, although challenges in specific markets like Hong Kong's commercial real estate pose potential risks. Overall, HSBC is well-positioned for stability and growth.

HSBC Holdings (HSBC) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$240.87B

Dividend Yield4.67%

Average Volume (3M)1.31M

Price to Earnings (P/E)13.9

Beta (1Y)0.60

Revenue Growth-2.96%

EPS Growth-13.66%

CountryUS

Employees211,940

SectorFinancial

Sector Strength70

IndustryBanks - Diversified

Share Statistics

EPS (TTM)1.95

Shares Outstanding3,456,350,300

10 Day Avg. Volume1,520,111

30 Day Avg. Volume1,310,685

Financial Highlights & Ratios

PEG Ratio0.92

Price to Book (P/B)1.03

Price to Sales (P/S)3.12

P/FCF Ratio3.11

Enterprise Value/Market Cap1.92

Enterprise Value/Revenue2.82

Enterprise Value/Gross Profit4.20

Enterprise Value/Ebitda15.53

Forecast

1Y Price Target

$74.00

Price Target Upside5.88% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering1

HSBC Holdings Business Overview & Revenue Model

Company DescriptionHSBC 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 MoneyHSBC generates revenue through multiple streams, primarily from net interest income and non-interest income. Net interest income is derived from the interest earned on loans and advances to customers, minus the interest paid on deposits and other borrowings. Non-interest income includes fees and commissions from various services such as investment banking, wealth management, and transaction services. Additionally, HSBC benefits from its significant global presence, allowing it to capitalize on cross-border transactions and foreign exchange services. Strategic partnerships with fintech companies and other financial institutions also enhance its service offerings and revenue potential. Furthermore, HSBC's focus on emerging markets provides opportunities for growth, particularly in Asia, where demand for banking services is rising.

HSBC Holdings Key Performance Indicators (KPIs)

Any

Operating Profit by Segment

Operating Profit by Segment
Reveals the profitability of each business segment, highlighting which areas are driving earnings and where there may be challenges or opportunities for growth.

Chart InsightsHSBC's Wealth & Personal Banking and Commercial Banking segments have shown robust growth, with notable increases in operating profit since 2020. The latest earnings call highlights continued strength in the wealth segment, supported by $22 billion in new assets and a surge in Hong Kong customers. However, the Corporate Centre's volatility, particularly a significant loss in late 2024, raises concerns. Despite macroeconomic uncertainties and potential tariff impacts, HSBC's strategic focus on wealth growth and capital returns, including a $3 billion buyback, underpins its resilience.

Data provided by:

Main Street Data

HSBC Holdings Earnings Call Summary

Earnings Call Date:Jul 30, 2025

(Q2-2025)

% Change Since: |

Next Earnings Date:Oct 28, 2025

Earnings Call Sentiment Positive

The earnings call presented a generally positive outlook, highlighting strong financial performance, significant growth in customer base, and advancements in digital services. However, concerns remain regarding challenges in the Hong Kong commercial real estate market and the Bank of Communications impairment.

Q2-2025 Updates

Positive Updates

Strong Half-Year Performance

Revenue in the first half grew 6% to $35.4 billion. Profit before tax was 5% higher at $18.9 billion. Annualized return on tangible equity was 18.2%, up 1.2% year-on-year.

Growth in Customer Base

In Hong Kong, HSBC attracted 100,000 new-to-bank customers every month, and in the U.K., the loan book grew by $6 billion over the quarter on a constant currency basis.

Dividend and Share Buyback

Announced a $0.10 dividend per share and a share buyback of up to $3 billion, bringing total shareholder distributions to $9.5 billion for the half-year.

Deposit Growth

Deposits grew by $83 billion year-on-year, a 5% increase, showing strong liquidity and customer trust.

Progress in Wealth Management

Fee and other income in Wealth businesses grew 21% year-on-year. Net new invested assets were $22 billion in the quarter.

Organizational Simplification Savings

On track to deliver $1.5 billion in simplification savings by the end of 2026, with $0.4 billion recognized in 2025.

Advancements in Digital Services

Launched HSBC Tokenised Deposit Services in Hong Kong and Singapore, with further expansion planned, enhancing cross-border payment capabilities.

Negative Updates

Hong Kong Commercial Real Estate Challenges

Increased ECL guidance due to ongoing pressures in Hong Kong commercial real estate, with a $1.1 billion charge in the second quarter.

Bank of Communications Impairment

A $1 billion impairment related to Bank of Communications, impacting other operating income.

Company Guidance

During the call, HSBC's leadership provided guidance and insight into their financial performance and strategic initiatives. They reported a 6% revenue growth in the first half of 2025, reaching $35.4 billion, and a 5% increase in profit before tax, totaling $18.9 billion. The bank announced a $0.10 dividend per share and a share buyback of up to $3 billion, with total shareholder distributions amounting to $9.5 billion for the half year. HSBC maintained its full-year banking net interest income (NII) guidance at around $42 billion despite challenges like HIBOR headwinds. They also projected a revised full-year expected credit loss (ECL) guidance of around 40 basis points, an increase from the previous 30 to 40 basis points range. The bank highlighted its ongoing efforts in organizational simplification, aiming to realize $1.5 billion in cost savings by 2026. Additionally, HSBC emphasized its strategic exits from non-core activities and investments in growth areas, such as their Wealth business and digital initiatives like HSBC Tokenised Deposit Services. The leadership reaffirmed their mid-teens return on tangible equity guidance for 2025 through 2027.

HSBC Holdings Financial Statement Overview

Summary

HSBC has exhibited strong financial health with consistent revenue growth and effective cash flow management. The zero debt position 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

Very Positive

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.

Balance Sheet

Positive

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.

Cash Flow

Very Positive

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.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	163.70B	61.25B	56.35B	76.17B	73.95B	77.46B
Gross Profit	110.15B	67.40B	64.44B	53.72B	64.25B	63.28B
EBITDA	29.76B	36.39B	33.81B	20.91B	23.19B	14.02B
Net Income	20.72B	23.98B	23.53B	15.56B	13.92B	5.23B
Balance Sheet
Total Assets	3.05T	3.02T	3.04T	2.97T	2.96T	2.98T
Cash, Cash Equivalents and Short-Term Investments	254.66B	284.51B	307.03B	350.05B	422.44B	328.73B
Total Debt	474.52B	242.35B	235.16B	100.44B	395.44B	117.44B
Total Liabilities	2.86T	2.82T	2.85T	2.77T	2.75T	2.78T
Stockholders Equity	190.81B	184.97B	185.33B	177.83B	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 Price69.89

Price Trends

50DMA

64.94

Positive

100DMA

61.92

Positive

200DMA

56.62

Positive

Market Momentum

MACD

1.62

Negative

RSI

73.16

Negative

STOCH

84.37

Negative

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 69.89 is above the 20-day moving average (MA) of 67.25, above the 50-day MA of 64.94, and above the 200-day MA of 56.62, indicating a bullish trend. The MACD of 1.62 indicates Negative momentum. The RSI at 73.16 is Negative, neither overbought nor oversold. The STOCH value of 84.37 is Negative, 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 (68)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HSBC	81 Outperform	$240.87B	13.87	10.69%	4.67%	-2.96%	-13.66%
BAC	74 Outperform	384.57B	15.20	9.37%	2.05%	4.95%	20.49%
JPM	74 Outperform	859.13B	16.03	15.84%	1.69%	4.00%	8.73%
SAN	74 Outperform	149.90B	10.53	12.75%	2.27%	-14.74%	17.03%
WFC	72 Outperform	272.81B	14.61	11.36%	1.96%	0.37%	19.89%
C	70 Outperform	190.51B	15.30	6.65%	2.21%	0.52%	89.25%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%

* Financial Sector Average

Performance Comparison

HSBC

HSBC Holdings

69.89

27.71

65.69%

BAC

Bank of America

51.70

13.35

34.81%

Citigroup

101.65

43.07

73.52%

JPM

JPMorgan Chase

313.42

107.85

52.46%

MUFG

Mitsubishi UFJ

15.94

6.14

62.65%

WFC

Wells Fargo

84.11

31.67

60.39%

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: Aug 19, 2025