On Friday, BofA Securities maintained a positive stance on HSBC Holdings (LON:HSBA:LN) (NYSE:HSBC), as analyst Perlie Mong reiterated a Buy rating and a price target of £10.35. In a recent business update, HSBC management outlined financial targets for the forthcoming years, including a mid-teens return on tangible equity (ROTCE) from 2025 to 2027, excluding notable items. Additionally, the bank has set new financial goals for 2025 and beyond. The global banking giant, currently valued at $196.32 billion, trades at an attractive P/E ratio of 8.87, according to InvestingPro data, which also indicates the stock is fairly valued based on its proprietary Fair Value model.
HSBC’s management anticipates wealth fee and other income to grow at a double-digit compound annual growth rate (CAGR) over the medium term. The bank also plans to incur approximately $1.8 billion in upfront re-organization costs during 2025-2026, which are expected to yield about $1.5 billion in simplification savings by 2027. InvestingPro analysis reveals the bank has been demonstrating strong financial performance, with impressive dividend growth of 98.34% and a substantial 61.76% return over the past year.
Following the release of HSBC’s re-segmentation data, BofA Securities has reviewed its estimates for the bank, which remain largely unchanged. The update has reinforced the firm’s confidence in HSBC’s prospects. Despite the stock trading at approximately 1.2 times its forecasted 2025 price to tangible book value (P/TBV), which is not considered inexpensive, BofA Securities sees potential for an increase in stock value. InvestingPro subscribers can access over 10 additional exclusive insights and a comprehensive Pro Research Report that provides deep-dive analysis of HSBC’s financial health, which currently rates as GOOD with a score of 2.83.
The price target of £10.35 remains in place, and the analyst has adjusted the American Depositary Receipt (ADR) price objective to $67 from the previous $64.69, accounting for foreign exchange rate fluctuations. This reaffirmed Buy rating and price target reflect BofA Securities’ continued endorsement of HSBC’s stock. The current analyst consensus gathered by InvestingPro shows targets ranging from $62 to $64.69, with the next earnings report expected on May 6, 2025.
In other recent news, HSBC Holdings has seen a series of updates and assessments from major financial analysts. UBS adjusted its price target for HSBC to GBP9.60, maintaining a neutral rating after the bank’s fourth-quarter performance exceeded expectations, with net interest income surpassing forecasts and a slight reduction in costs. Barclays (LON:BARC) upgraded HSBC’s stock rating from Equalweight to Overweight, raising the price target to £12.00, reflecting a positive outlook based on anticipated earnings improvements and cost efficiencies. This upgrade is supported by a 13% increase in estimated earnings per share for 2027, driven by better revenues and lower costs.
CFRA also increased its price target for HSBC to $69, maintaining a Buy rating, citing HSBC’s robust 2024 performance and plans for a $2 billion share buyback program. The bank’s profit before tax rose by $1.4 billion, primarily due to growth in its Wealth & Personal Banking and Global Banking & Markets divisions. Meanwhile, Citi reaffirmed its Buy rating and GBP9.60 target on HSBC shares, expressing confidence in the bank’s potential for earnings growth despite concerns about restructuring charges and cost guidance.
Barclays had earlier raised its price target to GBP9.40, maintaining an Equalweight rating, and highlighted potential upside risks to HSBC’s earnings. The analysts noted that their forecasts are about 10% higher than co-consensus profit before tax for 2026, with a projected 15% return on tangible equity extending into 2027. These developments indicate a mix of cautious optimism and confidence among analysts regarding HSBC’s financial outlook and strategic initiatives.
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