Shore Capital remains bearish on HSBC Holdings (LON:HSBA), following what the analysts argue were ‘mildly disappointing’ results. The Asia-focused lender updated investors on its full-year performance yesterday, with the group’s profits falling marginally short of expectations.
The update sent HSBC’s share price tumbling in yesterday’s session, with the stock closing 3.09 percent in the red at 737.00p. The fall pressured the benchmark FTSE 100 index which shed less than a point to close 0.01 percent lower at 7,246.77. The group’s shares remain more than three percent up over the past year, as compared with a near one-percent dip in the Footsie.
ShoreCap bearish on HSBC
Shore Capital reiterated its ‘sell’ rating on HSBC yesterday, without specifying a price target on the shares. Citywire quoted the broker’s analyst Gary Greenwood as saying that while the dividend was maintained “there is no indication as to when growth may resume” and “the group is signalling further share buybacks will be considered when appropriate but nothing concrete”.
“All mildly disappointing, which is not good given the lofty rating it is trading on,” the analyst continued, pointing out that the broker believed that significant further improvement in returns were required to justify HSBC’s current share price, “above and beyond our own and consensus’ current expectations”.
Other analysts on lender
The Financial Times meanwhile quoted Douglas Morton, head of Asia research for Northern Trust Capital Markets, as saying that there was likely “some disappointment that no new buybacks were announced ... yet”.
Goldman Sachs, which sees HSBC as ‘neutral,’ set a price target on the shares of 820p yesterday, while Credit Suisse, which rates the group as ‘underperform,’ boosted its valuation on the stock from 650p to 680p. According to MarketBeat, Europe’s biggest lender currently has a consensus ‘hold’ rating and an average price target of 758.79p.