Analysts at two major investment banks today increased their expectations for HSBC Holdings PLC (LSE:HSBA)’s share price following the bank’s quarterly results statement last week.
There was speculation around whether the bank, which has come under mounting pressure from activist shareholder Ping An, would split its business to satisfy its largest shareholder.
Citigroup said in a research note today that it has revised HSBC’s net interest income figures to factor in “higher US/UK rates” and the bank’s latest “sensitivity”.
Its analysts now expect HSBC’s share price could rise to a target price of 700p, where they think it would represent fair value, from previous expectations of 690p, and recommend its shares as a ‘buy’.
They also revised HSBC's earnings per share estimates “by 58%/9%” respectively for 2022 and 2023, following increases to the Bank of England's base rate of interest.
UK interest rates are now estimated to reach 2.5% by the end of this year, and settle at an average of 2% from 2023 to 2025, according to Citi.
Analysts in the Royal Bank of Canada (TSX:RY)’s capital markets team have raised their price target for HSBC to 650p, up from 590p, reiterating their expectation that the bank will outperform the market.
The market consensus is to hold shares in the bank,10 analysts say in comparison to the eight that are recommending that investors buy HSBC shares.
Analysts expect the bank to outperform the market, three to one, according to SharePad data.
HSBC’s share price rose 0,8% to 546.8p.