Shore Capital has weighed in on news of HSBC Holdings’ (LON:HSBA) CEO departure, arguing that the announcement has overshadowed decent numbers from the bank, Citywire reports. The comments came after the Asia-focused lender said with its half-year results announcement yesterday that John Flint was stepping down after just 18 months on the job.
HSBC’s share price drifted lower in London in the previous session, giving up 2.99 percent to close at 626.80p. The shares underperformed the broader market selloff which saw the benchmark FTSE 100 index giving up 2.47 percent to close at 7,223.85 points.
Shore Capital weighs in on HSBC
Citywire quoted Shore Capital analyst Gary Greenwood as commenting yesterday that HSBC CEO Flint’s departure came as “a major surprise and is likely to overshadow what are a better-than-expected set of results”.
“Our neutral stance on HSBC is largely a function of its valuation, especially when compared to its UK-listed peers, and it remains our view that a cheaper alternative can be constructed by owning a basket of Barclays, Lloyds, and Standard Chartered,” the broker elaborated. Greenwood has a target of 630p on the HSBC share price.
Other analysts on FTSE 100 lender
Nicholas Hyett at Hargreaves Lansdown also commented yesterday that Flint’s departure after just 18 months in the CEO role was a surprise.
“However, the board clearly feels a change of tack is required to deal with mounting macroeconomic and geopolitical challenges,” the analyst pointed out in a note, adding that leadership aside, the Asia-focused lender’s greatest concern was probably the US-China trade spat.
“If China sneezes, HSBC will come down with a bad case of the flu,” Hyett commented, further adding that “with no permanent hand on the tiller, HSBC’s strategy is unclear”. He, however, reckons that “a prospective yield of 6.5%, plenty of longer-term growth potential and a healthy level of capitalisation means the bank will have attractions to those in search of a sizeable yield”.
According to MarketBeat, the blue-chip group currently has a consensus ‘hold’ rating, while the average target on the HSBC share price stands at 658.93p.