HSBC share price sits an all-time high: is it a buy after earnings?

HSBC (LON: HSBA) share price price continued its strong comeback as investors focused on the company’s financial results. It jumped to a record high of 668p on Monday, meaning that it has soared by over 185% from its lowest point in 2020.

HSBC earnings ahead

British banks have been in an upbeat mood in the past few months. This trend accelerated last week after companies like Lloyds, Barclays, and NatWest published strong financial results amid a high-interest rate environment.

HSBC and Standard Chartered, two British banks with a huge presence in China will be in the spotlight this week as they publish their results. HSBC will go first on Tuesday followed by StanChart on Thursday.

Analysts are optimistic that HSBC will publish strong financial results. The general consensus is that its first-quarter net operating income rose to $21 billion in the first quarter. 

This growth will be driven by a $8.5 billion net interest income (NII) and $12.5 billion other income. Its profit for the period is expected to come in at $10.8 billion.

For the year, HSBC is expected to guide that its annual revenue rose to $67 billion while its net profit for the year will be at $27.5 billion. However, its revenue for 2025 and 2026 is expected to drop to $62.8 billion and $64 billion, respectively.

These results come at a time when investors are starting to position for a low interest rate environment. Most analysts expect the Bank of England (BoE) and the European Central Bank (BoE) will start cutting interest rates as soon as in June.

As a result, there is a possibility that the impacts of high interest rates are starting to fade as we saw with companies like NatWest and Lloyds.

Still, banks are providing strong returns to shareholders. In the case of HSBC, the company is expected to deliver a 21 cents special dividend for the quarter. It paid 61 cents last year.

The company has also taken actions to simplify its operations. It has slashed the number of workers in key divisions and exited its unprofitable locations like Argentina. It is expected to take a $1 billion charge for its Argentinian business in these results.

HSBC share price forecast

HSBC chart by TradingView

Turning to the weekly chart, we see that the HSBA stock price has been in a spectacular comeback in the past few months. It has recently crossed the important resistance level at 630p, its highest swing in 2023 and the upper side of the ascending triangle pattern. 

HSBC stock has constantly remained above the 50-week and 25-week Exponential Moving Averages (EMA) while the Relative Vigor Index (RVI) has moved to 0.2.

Therefore, the long-term outlook for HSBC is mostly bullish, and I expect it to reach to 700p later this year. Still, in the short-term, the stock could also retreat as sellers target the key support at 630p to form a break and retest pattern.