HSBC share price heads south as Deutsche Bank says ‘sell’

Shares in HSBC Holdings (LON:HSBA) have fallen deep into the red in today’s session, pressured by rating downgrade at Deutsche Bank. Proactive Investors reports that the analysts reckon that there are significant headwinds arising that are not reflected in consensus forecasts or the share price.

As of 13:30 GMT, HSBC’s share price had given up 1.53 percent to 637.70p, underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.99 percent lower at 6,849.43 points. The group’s shares have given up just under a fifth of their value over the past year, as compared with a near 12-percent dip in the Footsie.

Deutsche Bank trims stance on HSBC

Deutsche Bank trimmed its rating on HSBC to ‘sell’ today, further lowering its price target on the shares from 718p to 550p. Proactive Investors quoted the analysts as saying that while the Asia-focused lender has been a relative outperformer in recent years despite a 16-percent fall in the shares since the start of last year, it thinks there are significant headwinds arising that are not reflected in consensus forecasts or the share price.

Headwinds include changes to US interest rate expectations, which has had an impact on the outlook for revenue growth, as well as Hong Kong, where Deutsche Bank expects to see a 25-percent drop in house price from September 2018 to the end of 2019.

Other analysts on blue-chip lender

Barclays, which also rates HSBC as a ‘sell,’ set a price target of 640p on the shares last week, while Citigroup reaffirmed the Asia-focused lender as ‘neutral,’ without specifying a valuation on the stock. According to MarketBeat, the blue-chip group currently has a consensus ‘hold’ rating and an average price target of 701.43p.

As of 13:51 GMT, Monday, 14 January, HSBC Holdings plc share price is 637.70p.