HSBC Holdings plc

XTRA:HBC1 Stock Report

Market Cap: €154.8b

HSBC Holdings Valuation

Is HBC1 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of HBC1 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: HBC1 (€8.79) is trading below our estimate of fair value (€23.04)

Significantly Below Fair Value: HBC1 is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for HBC1?

Key metric: As HBC1 is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for HBC1. This is calculated by dividing HBC1's market cap by their current earnings.
What is HBC1's PE Ratio?
PE Ratio7.1x
EarningsUS$22.57b
Market CapUS$160.93b

Price to Earnings Ratio vs Peers

How does HBC1's PE Ratio compare to its peers?

The above table shows the PE ratio for HBC1 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average14.1x
CBK Commerzbank
8.5x8.8%€18.2b
PCZ ProCredit Holding
4.2x9.9%€450.0m
CBA Commonwealth Bank of Australia
28x4.5%AU$265.9b
RY Royal Bank of Canada
15.5x2.1%CA$247.2b
HBC1 HSBC Holdings
7.1x-1.4%€128.6b

Price-To-Earnings vs Peers: HBC1 is good value based on its Price-To-Earnings Ratio (7.1x) compared to the peer average (14.1x).

Price to Earnings Ratio vs Industry

How does HBC1's PE Ratio compare vs other companies in the European Banks Industry?

2 CompaniesPrice / EarningsEstimated GrowthMarket Cap
HBC1 7.1xIndustry Avg. 7.4xNo. of Companies46PE0612182430+
2 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: HBC1 is good value based on its Price-To-Earnings Ratio (7.1x) compared to the European Banks industry average (7.4x).

Price to Earnings Ratio vs Fair Ratio

What is HBC1's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

HBC1 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio7.1x
Fair PE Ratio11.3x

Price-To-Earnings vs Fair Ratio: HBC1 is good value based on its Price-To-Earnings Ratio (7.1x) compared to the estimated Fair Price-To-Earnings Ratio (11.3x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst HBC1 forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
Current€8.79
€9.90
+12.6%
9.3%€11.76€8.71n/a16
Nov ’25€8.54
€9.54
+11.7%
9.4%€11.46€8.37n/a16
Oct ’25€8.04
€9.33
+16.1%
9.2%€11.15€7.54n/a18
Sep ’25€7.97
€9.30
+16.7%
9.6%€11.16€7.56n/a18
Aug ’25€7.84
€9.47
+20.8%
9.5%€11.43€7.90n/a18
Jul ’25€8.16
€9.34
+14.4%
9.4%€11.59€7.94n/a18
Jun ’25€8.19
€9.35
+14.2%
11.1%€11.70€7.85n/a18
May ’25€8.11
€9.29
+14.6%
13.2%€11.88€7.33n/a18
Apr ’25€7.31
€9.04
+23.7%
14.3%€11.73€7.00n/a18
Mar ’25€7.19
€8.88
+23.4%
15.8%€11.64€6.02n/a19
Feb ’25€7.25
€9.07
+25.2%
14.6%€11.43€6.72n/a19
Jan ’25€7.48
€8.95
+19.6%
14.4%€11.04€6.34n/a19
Dec ’24€7.11
€9.00
+26.6%
14.3%€11.15€6.41n/a19
Nov ’24€6.82
€9.37
+37.4%
13.8%€11.49€6.60€8.5418
Oct ’24€7.55
€9.55
+26.5%
12.9%€12.02€7.33€8.0419
Sep ’24€7.01
€9.20
+31.4%
14.2%€11.74€6.88€7.9720
Aug ’24€7.65
€8.92
+16.5%
14.0%€11.93€6.68€7.8420
Jul ’24€7.17
€8.72
+21.7%
14.2%€11.57€6.55€8.1619
Jun ’24€6.98
€8.65
+23.9%
15.7%€11.77€5.85€8.1920
May ’24€6.60
€7.97
+20.8%
14.4%€10.16€5.69€8.1120
Apr ’24€6.29
€8.01
+27.4%
14.1%€9.84€5.79€7.3120
Mar ’24€7.30
€8.17
+12.0%
12.9%€10.03€5.93€7.1920
Feb ’24€6.76
€7.42
+9.8%
14.4%€9.01€5.28€7.2521
Jan ’24€5.82
€7.25
+24.6%
12.2%€8.75€5.47€7.4820
Dec ’23€5.86
€7.25
+23.8%
12.8%€8.82€5.51€7.1119
Nov ’23€5.39
€7.59
+40.8%
16.1%€9.40€4.57€6.8219

Analyst Forecast: Target price is less than 20% higher than the current share price.

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