This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.
Trade Parameters
Technical Observations – For
Technical Observations – Against
Pros: Bullish bounce by shares after near 10% sell-off. Hopes of fresh talks between US and China that could avoid more tariffs and/or a trade war. Attractive 6% forward dividend yield. No bailout baggage to shed. Rising interest rates are a boon for banks in terms of profitability,
Risks: to HSBC include its Asia exposure in the case of a trade war, an emerging markets crisis or anything that puts Chinese economic growth at risk. A stronger USD makes HSBC’s dollar dividends worth less in GBP. More equity market weakness could see risk assets like banks shunned. Lastly, Broker downgrades.
Brokers/analysts are bullish on the shares with only 13% suggesting Sell and 87% suggesting upside to a consensus target of 775p, well above the trendline of falling highs and our target of 720p. With price targets so bullish, the 48% of Neutral brokers could be encouraged to upgrade ratings if the share price bounce persists.
Next Event: Q3 Results, 29 Oct
Latest Broker 12-Month Consensus: 39% Buy, 48% Hold, 13% Sell (full breakdown on request)
Source: DowJones Newswires, Reuters News, Bloomberg or Company Press releases
| 1wk | 1m | 3m | 6m | 1yr | 2yr | 3yr | 4yr | 5yr | |
| Perf % | -1.8 | -8.8 | -10.2 | -6.8 | -10.6 | 16.3 | 30.5 | 0.1 | -6.2 |
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Prepared by Michael van Dulken, Head of Research