HSBC share price crossed key level as focus shifts to earnings

HSBC (LON: HSBA) share price has done well this year as investors cheer the company’s turnaround strategy. It soared to an all-time high of 645.6p on Friday as the focus shifts to next week’s earnings release.

HSBC earnings ahead

HSBC has been one of the best-performing bank stocks this year. The shares have jumped by ~25% this year while the SPDR Bank ETF (KBE) has dropped by more than 5%. It has also outperformed other UK banks like Lloyds, Barclays, and Standard Chartered. 

Most importantly, HSBC share price has outperformed other global blue-chip banks like Bank of America, Goldman Sachs, and Morgan Stanley. As a result, this performance is a validation of the company’s management.

HSBC has been implementing a major turnaround strategy by exiting its key unprofitable markets like in France, Canada, and the United States. Its performance has therefore proven the management right after its battle with Ping An, its biggest shareholder. Ping An wanted it to break into a European and Asian bank.

HSBC stock price has done well after the recent results by some of the biggest American banks. Most of its peers like JP Morgan, Morgan Stanley, and Citigroup published strong results, helped by the rising interest rates.

The next key catalyst for HSBC stock is the upcoming earnings, which is scheduled for August 1. Analysts believe that the company’s business did well in the second quarter. 

The most recent results showed that its profit before tax rose by $8.7 billion in Q1’22 to over $12.9 billion in Q1’23. Its revenue jumped by 64% to over $20.2 billion while its net interest margin came in at 1.69%.

HSBC guided that its return on average tangible equity (RoTE) will be at least 12%. Analysts will watch the impact of the company’s SVB UK. Therefore, in light of all this, I believe that HSBC is a good investment, because of its 5% dividend yield and strong growth.

HSBC share price forecast

HSBA chart by TradingView

The daily chart shows that the HSBA stock price has been in a strong bullish trend in the past few months. It recently crossed the important resistance point at 626.5p, the highest point on July 3rd. 

The shares have also moved above the ascending trendline shown in orange. It has also moved above the 25-day and 50-day exponential moving averages. Therefore, there is a likelihood that the shares will continue rising as buyers target the next key resistance point at 700p.