HSBC share price: Deutsche Bank trims valuation ahead of results

on Apr 26, 2017
Updated: Oct 21, 2019

Deutsche Bank has trimmed its valuation on HSBC Holdings (LON:HSBA), while sticking to its ‘hold’ recommendation on the shares. The move comes ahead of the FTSE 100 lender’s first-quarter results next week.

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HSBC’s share price rose in yesterday’s session, adding 0.66 percent to close at 642.50p, and outperforming the broader London market, with the benchmark FTSE 100 index climbing 10.96 points to end the session 0.15 percent higher at 7,275.64. The group’s shares have gained just under 40 percent over the past year, but have given up more than two percent in the year-to-date.
Deutsche Bank lowered its price target on HSBC from 635p to 616p yesterday, while reaffirming the company as a ‘hold’. The move comes ahead of the Asia-focused group’s results on May 4 and the analysts expect the company’s underlying revenues to have grown by between 12 percent and 13 percent during the first three months of the year to $12.4 billion, referencing seasonality in its Global Banking and Markets unit and positive results out from its US peers.

Sharecast further quoted the broker as highlighting that revenue growth was key to an improvement in HSBC’s return on equity. Profits before tax in the quarter meanwhile are pegged at $5.3 billion for reported earnings per share of 12.5 cents.
Deutsche Bank’s comments come after the lender’s boss Stuart Gulliver said at a shareholders’ meeting in Hong Kong this week that the Asia-focused bank was confident that it can maintain dividend payouts in the foreseeable future and expects to exceed risk-weighted asset and cost-saving targets.
As of April 24, the consensus forecast amongst 25 polled investment analysts covering HSBC for the Financial Times advises investors to hold their position in the company.
As of 08:07 BST, Wednesday, 26 April, HSBC Holdings plc share price is 642.50p.


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