HSBC Holdings PLC

HSBC Holdings PLC (LSE: HSBA) is an FTSE 100 Index listed banking and financial services company. The Company’s segments include Wealth and Personal Banking (WPB), Commercial Banking (CMB), and Global Banking and Markets (GBM). WPB provides a range of retail banking and wealth Index-listed management services, including insurance and investment. This Report covers the Key Recommendation Rationale, and Conclusion on the stock.

Key Recommendation Rationale – Sell at GBX 970.20

• Resistance near Current levels: HSBA’s stock price has breached Resistance (R1) which was stated in the previous report on 23 June 2025 therefore, there can be a possibility of a decline from resistance levels. Considering the market conditions and the price action, it is prudent to exit the stock.
• Profitability Impacted by Non-Recurring Items and Business Disposals: The reported decrease in profit before tax by $3.2 billion in Q1 FY25 compared to the prior year largely stems from the absence of significant one-off gains related to previous disposals, notably in Canada and Argentina. This indicates that the current core business performance, while showing some strengths in Wealth and Markets, faces challenges in sustaining earlier elevated profit levels without relying on such exceptional items. Investors may view this as a signal of profit volatility in the near term.
• Uncertainty Surrounding Macroeconomic Environment and Lending Demand - The outlook highlights considerable uncertainty due to protectionist trade policies and geopolitical tensions, which are expected to weigh on consumer and business confidence. Additionally, the expectation of muted lending demand through 2025 suggests potential headwinds for revenue growth from core banking activities. While the bank remains focused on cost discipline and strategic growth areas, these external factors could constrain overall performance and make forward guidance less predictable.

Valuation Methodology: Price/ Earnings Approach

Share Price Chart  

 HSBA Daily Technical Chart, Source - Refinitiv 

Conclusion

HSBA is expected to trade at a discount, considering the Profitability adversely Impacted by Non-Recurring Items and Business Disposals and fears of global slowdown. For conducting the valuation, the following peers have been considered Lloyds Banking Group PLC (LSE: LLOY), Investec PLC (LSE: INVP) and others.

Given its current trading levels, Uncertainty Surrounding Macroeconomic Environment and Lending Demand, recent rally in the share price, relative valuation, and associated risks, it is prudent to exit the stock at the current levels. Hence, a ‘Sell’ recommendation is given on the stock at the current Market Price of GBX 970.20 as of 29 July 2025 at 11:11 AM GMT+1.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 29 July 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level which the stock is expected to reach as per the relative valuation method and/or technical analysis taking into consideration both short-term and long-term scenario.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.’

Note 6: Dividend Yield may vary as per the stock price movement.