HSBC Holdings PLC (LSE:HSBA, NYSE:HSBC) has had its share price target raised to 1,375p from 1,275p by RBC Capital Markets after the broker increased earnings forecasts following stronger-than-expected second-quarter results.
RBC retained its Sector Perform rating, with the revised target still below HSBC’s 1,525.8p share price at the time of the note, suggesting the broker sees much of the bank’s improving outlook as already reflected in the valuation.
The broker lifted its 2027 adjusted pre-tax profit forecast by 5%, driven by higher banking net interest income (NII) and fees, partly offset by increased expenses. Forecast upgrades were made across all divisions, with Corporate and Institutional Banking providing the largest contribution.
RBC’s revisions followed a strong second quarter in which HSBC reported adjusted pre-tax profit of $10.34 billion, 5% ahead of consensus. Adjusted revenue of US$19.04 billion beat expectations by 2%, while banking NII reached US$11.64 billion, 1% above consensus.
RBC now forecasts banking NII of $47.4 billion in 2026, $50.2 billion in 2027 and US$51.4 billion in 2028, compared with management guidance for more than US$46 billion this year.
The broker also raised adjusted EPS forecasts to $1.80 for 2026, $2.03 for 2027 and US$2.19 for 2028. Its adjusted return on tangible equity forecasts stand at 19% in 2026 and 19.4% in both 2027 and 2028, above management’s guidance of at least 17%.
RBC expects HSBC to return $77.2 billion to shareholders between 2026 and 2028 through $50.2 billion of dividends and $27 billion of buybacks, equivalent to an average shareholder return yield of around 7.5%.
