HSBC Holdings (LSE:HSBA) - Share price, News & Analysis

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

HSBA (£4.67) is trading below our estimate of [[fair value]] (£13.57)

HSBA fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	3/6
Past Performance	5/6
Financial Health	5/6
Dividends	3/6

HSBA Stock Overview

HSBC Holdings plc provides banking and financial services worldwide.

Rewards

Trading at 65.6% below our estimate of its fair value

Earnings are forecast to grow 16.74% per year

Earnings grew by 48.1% over the past year

Trading at good value vs. industry average Price-To-Earnings ratio

Trading below our calculated fair Price-To-Earnings ratio

Analysts in good agreement that stock price will rise by 49.5%

Risk Analysis

Unstable dividend track record

HSBC Holdings Competitors

Lloyds Banking Group

LSE:LLOY

UK£28.1b

NatWest Group

LSE:NWG

UK£21.7b

Barclays

LSE:BARC

UK£22.9b

Standard Chartered

LSE:STAN

UK£16.5b

Price History & Performance

Summary of all time highs, changes and price drops for HSBC Holdings
Historical stock prices
Current Share Price	UK£4.67
52 Week High	UK£5.67
52 Week Low	UK£3.82
Beta	0.48
1 Month Change	-12.64%
3 Month Change	-13.42%
1 Year Change	20.24%
3 Year Change	-22.36%
5 Year Change	-38.26%
Change since IPO	657.79%

Shareholder Returns

	HSBA	GB Banks	GB Market
7D	-8.4%	-7.7%	-1.8%
1Y	20.2%	-1.4%	-15.2%

Return vs Industry: HSBA exceeded the UK Banks industry which returned -1.4% over the past year.

Return vs Market: HSBA exceeded the UK Market which returned -15.1% over the past year.

Price Volatility

Is HSBA's price volatile compared to industry and market?
HSBA volatility
HSBA Average Weekly Movement	3.7%
Banks Industry Average Movement	5.0%
Market Average Movement	5.5%
10% most volatile stocks in GB Market	10.9%
10% least volatile stocks in GB Market	2.9%

Stable Share Price: HSBA is less volatile than 75% of UK stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: HSBA's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1865	218,866	Noel Quinn	https://www.hsbc.com

HSBC Holdings plc provides banking and financial services worldwide. The company operates through Wealth and Personal Banking, Commercial Banking, and Global Banking and Markets segments. The Wealth and Personal Banking segment offers retail banking and wealth products, including current and savings accounts, mortgages and personal loans, credit and debit cards, and local and international payment services; and wealth management services comprising insurance and investment products, global asset management services, investment management, and private wealth solutions.

HSBC Holdings Fundamentals Summary

How do HSBC Holdings's earnings and revenue compare to its market cap?
HSBA fundamental statistics
Market Cap	UK£92.22b
Earnings (TTM)	UK£12.22b
Revenue (TTM)	UK£43.33b

7.5x

P/E Ratio

0.6x

P/B Ratio

Is HSBA overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
HSBA income statement (TTM)
Revenue	US$48.29b
Cost of Revenue	US$0
Gross Profit	US$48.29b
Other Expenses	US$34.67b
Earnings	US$13.62b

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

Oct 25, 2022

Earnings per share (EPS)	0.69
Gross Margin	100.00%
Net Profit Margin	28.21%
Debt/Equity Ratio	313.1%

How did HSBA perform over the long term?

See historical performance and comparison

Dividends

5.2%

Current Dividend Yield

40%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

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

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

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

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for HSBA. This is calculated by dividing HSBA's market cap by their current preferred multiple.
What is HSBA's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$102.76b

HSBA key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	n/a
Enterprise Value/EBITDA	n/a
PEG Ratio	0.5x

Price to Earnings Ratio vs Peers

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

HSBA PE Ratio vs Peers

The above table shows the PE ratio for HSBA vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	7x
LLOY Lloyds Banking Group	6.5x	2.2%	UK£28.1b
NWG NatWest Group	8x	5.4%	UK£21.7b
BARC Barclays	4.6x	4.3%	UK£22.9b
STAN Standard Chartered	8.9x	11.3%	UK£16.5b
HSBA HSBC Holdings	7.5x	16.7%	UK£92.2b

Price-To-Earnings vs Peers: HSBA is expensive based on its Price-To-Earnings Ratio (7.5x) compared to the peer average (7x).

Price to Earnings Ratio vs Industry

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

Price-To-Earnings vs Industry: HSBA is good value based on its Price-To-Earnings Ratio (7.5x) compared to the European Banks industry average (8.5x)

Price to Earnings Ratio vs Fair Ratio

What is HSBA'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.

HSBA PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	7.5x
Fair PE Ratio	14.1x

Price-To-Earnings vs Fair Ratio: HSBA is good value based on its Price-To-Earnings Ratio (7.5x) compared to the estimated Fair Price-To-Earnings Ratio (14.1x).

Share Price vs Fair Value

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

Below Fair Value: HSBA (£4.67) is trading below our estimate of fair value (£13.57)

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

Analyst Price Targets

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

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.

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Future Growth

How is HSBC Holdings forecast to perform in the next 1 to 3 years based on estimates from 19 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

16.7%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: HSBA's forecast earnings growth (16.7% per year) is above the savings rate (0.9%).

Earnings vs Market: HSBA's earnings (16.7% per year) are forecast to grow faster than the UK market (8.9% per year).

High Growth Earnings: HSBA's earnings are forecast to grow, but not significantly.

Revenue vs Market: HSBA's revenue (7.1% per year) is forecast to grow faster than the UK market (4.5% per year).

High Growth Revenue: HSBA's revenue (7.1% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: HSBA's Return on Equity is forecast to be low in 3 years time (10.9%).

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Past Performance

How has HSBC Holdings performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

3.5%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: HSBA has high quality earnings.

Growing Profit Margin: HSBA's current net profit margins (28.2%) are higher than last year (19.2%).

Past Earnings Growth Analysis

Earnings Trend: HSBA's earnings have grown by 3.5% per year over the past 5 years.

Accelerating Growth: HSBA's earnings growth over the past year (48.1%) exceeds its 5-year average (3.5% per year).

Earnings vs Industry: HSBA earnings growth over the past year (48.1%) exceeded the Banks industry 43.6%.

Return on Equity

High ROE: HSBA's Return on Equity (7.9%) is considered low.

Discover strong past performing companies

Financial Health

How is HSBC Holdings's financial position? (This company is analysed differently as a bank or financial institution)

Financial Health Score

5/6

Financial Health Score 5/6

Asset Level
Allowance for Bad Loans
Low Risk Liabilities
Loan Level
Low Risk Deposits
Level of Bad Loans

Financial Position Analysis

Debt to Equity History and Analysis

Balance Sheet

Financial Institutions Analysis

Asset Level: HSBA's Assets to Equity ratio (15.2x) is moderate.

Allowance for Bad Loans: HSBA has a low allowance for bad loans (56%).

Low Risk Liabilities: 63% of HSBA's liabilities are made up of primarily low risk sources of funding.

Loan Level: HSBA has an appropriate level of Loans to Assets ratio (38%).

Low Risk Deposits: HSBA's Loans to Deposits ratio (64%) is appropriate.

Level of Bad Loans: HSBA has an appropriate level of bad loans (1.7%).

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Dividend

What is HSBC Holdings's current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

5.19%

Current Dividend Yield

Dividend Yield vs Market

HSBC Holdings Dividend Yield vs Market

How does HSBC Holdings dividend yield compare to the market?
Segment	Dividend Yield
Company (HSBC Holdings)	5.2%
Market Bottom 25% (GB)	2.1%
Market Top 25% (GB)	6.1%
Industry Average (Banks)	5.0%
Analyst forecast in 3 Years (HSBC Holdings)	8.0%

Notable Dividend: HSBA's dividend (5.19%) is higher than the bottom 25% of dividend payers in the UK market (2.12%).

High Dividend: HSBA's dividend (5.19%) is low compared to the top 25% of dividend payers in the UK market (6.11%).

Stability and Growth of Payments

Stable Dividend: HSBA's dividend payments have been volatile in the past 10 years.

Growing Dividend: HSBA's dividend payments have fallen over the past 10 years.

Current Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (39.8%), HSBA's dividend payments are well covered by earnings.

Future Payout to Shareholders

Future Dividend Coverage: HSBA's dividends in 3 years are forecast to be covered by earnings (50.1% payout ratio).

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

3.1yrs

Average management tenure

CEO

Noel Quinn (60 yo)

3.17yrs

Tenure

US$6,628,121

Compensation

Mr. Noel Paul Quinn has been Group Chief Executive Officer of HSBC Holdings Plc since March 17, 2020 and serves as its Member of Group Management Board. He has been Executive Director of HSBC Holdings Plc...

CEO Compensation Analysis

Noel Quinn's Compensation vs HSBC Holdings Earnings

How has Noel Quinn's remuneration changed compared to HSBC Holdings's earnings?
Date	Total Comp.	Salary	Company Earnings
Jun 30 2022	n/a	n/a	US$14b
Mar 31 2022	n/a	n/a	US$12b
Dec 31 2021	US$7m	US$2m	US$13b
Sep 30 2021	n/a	n/a	US$11b
Jun 30 2021	n/a	n/a	US$9b
Mar 31 2021	n/a	n/a	US$6b
Dec 31 2020	US$6m	US$2m	US$4b
Sep 30 2020	n/a	n/a	-US$2b
Jun 30 2020	n/a	n/a	-US$561m
Mar 31 2020	n/a	n/a	US$4b
Dec 31 2019	US$4m	US$666k	US$6b

Compensation vs Market: Noel's total compensation ($USD6.63M) is about average for companies of similar size in the UK market ($USD5.55M).

Compensation vs Earnings: Noel's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: HSBA's management team is considered experienced (3.1 years average tenure).

Board Members

Experienced Board: HSBA's board of directors are considered experienced (5.8 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

LSE:HSBA Recent Insider Transactions by Companies or Individuals
Date	Value	Name	Entity	Shares	Max Price
17 May 22	BuyUK£75,150	Dame Carolyn Fairbairn	Individual	15,000	UK£5.01
12 May 22	BuyUK£72,705	Geraldine Buckingham	Individual	15,000	UK£4.85
12 May 22	BuyUK£6,133	Geraldine Buckingham	Individual	15,000	UK£0.41
28 Apr 22	BuyUK£5,135	Noel Quinn	Individual	1,011	UK£5.08
23 Mar 22	BuyUK£76,469	Xiao Ying Duan	Individual	15,000	UK£5.10

Ownership Breakdown

What is the ownership structure of HSBA?
Owner Type	Number of Shares	Ownership Percentage
Public Companies	0	0%
Individual Insiders	8,423,998	0.04%
State or Government	23,941,920	0.1%
Private Companies	35,336,791	0.2%
Employee Share Scheme	127,969,625	0.6%
General Public	9,625,608,258	48.8%
Institutions	9,913,634,565	50.2%

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Top Shareholders

Top 25 shareholders own 38.37% of the company

Ownership	Name	Shares	Current Value	Change %	Portfolio %
8.39%	Ping'an Assets Management Co., Ltd.	1,655,479,531	$7.7b	0%	54.37%
7.93%	BlackRock, Inc.	1,564,306,093	$7.3b	-8.09%	0.2%
4.37%	The Vanguard Group, Inc.	861,692,689	$4.0b	2.38%	0.11%
2.69%	Norges Bank Investment Management	530,026,865	$2.5b	-8.7%	0.39%
2.07%	Legal & General Investment Management Limited	407,883,533	$1.9b	0.63%	0.65%
1.64%	State Street Global Advisors, Inc.	323,894,405	$1.5b	-4.86%	0.1%
1.13%	HSBC Global Asset Management (UK) Limited	223,379,120	$1.0b	1.26%	0.98%
1.11%	UBS Asset Management	218,791,208	$1.0b	9.64%	0.22%
0.83%	Ignis Investment Services Limited	164,542,662	$768.9m	-2.04%	3.35%
0.65%	HSBC Holdings General Employee Benefit Trust	127,969,625	$598.0m	30.02%	no data
0.65%	Northern Trust Global Investments	127,671,989	$596.6m	-2.37%	0.15%
0.64%	Schroder Investment Management Limited	126,379,001	$590.6m	-6.75%	0.53%
0.59%	FMR LLC	117,261,226	$548.0m	2.62%	0.06%
0.54%	Geode Capital Management, LLC	105,956,203	$495.1m	0.4%	0.07%
0.52%	Societe Generale Group, Banking Investments	102,270,171	$477.9m	78.73%	5.29%
0.51%	Amundi Asset Management	100,852,698	$471.3m	16.53%	0.16%
0.51%	Aviva Investors Global Services Limited	99,691,258	$465.9m	10.14%	1.04%
0.5%	BNY Mellon Asset Management	97,826,334	$457.1m	2.77%	0.12%
0.48%	Royal London Asset Management Limited	95,287,680	$445.3m	3.07%	0.96%
0.47%	abrdn plc	93,321,822	$436.1m	-49.01%	0.51%
0.46%	BNP Paribas, Private & Investment Banking Investments	90,626,190	$423.5m	138.19%	3.28%
0.44%	SAFE Investment Company Limited	86,784,887	$405.5m	5.91%	4.61%
0.43%	GQG Partners LLC	85,544,312	$399.7m	105.77%	0.68%
0.43%	Kuwait Investment Authority	85,402,439	$399.1m	14.17%	1.76%
0.4%	J.P. Morgan Asset Management, Inc.	79,768,729	$372.8m	1.25%	0.08%

Ticker	Exchange	Primary Security	Security Type	Country	Currency	Listed on
HBCY.F	OTCPK (Pink Sheets LLC)	Yes	Ordinary Shares USD 0.50	US	USD	Apr 1991
HSBA	LSE (London Stock Exchange)	Yes	Ordinary Shares USD 0.50	GB	GBP	Apr 1991
HSBC.BH	BER (The Bermuda Stock Exchange)	Yes	Ordinary Shares USD 0.50	BM	USD	Apr 1991
5	SEHK (The Stock Exchange of Hong Kong Ltd.)	Yes	Ordinary Shares USD 0.50	HK	HKD	Apr 1991
HBC1	XTRA (XETRA Trading Platform)	Yes	Ordinary Shares USD 0.50	DE	EUR	Apr 1991
HBC1	DB (Deutsche Boerse AG)	Yes	Ordinary Shares USD 0.50	DE	EUR	Apr 1991
HSBAL	BATS-CHIXE (BATS 'Chi-X Europe')	Yes	Ordinary Shares USD 0.50	GB	GBP	Apr 1991
5	SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)	Yes	Ordinary Shares USD 0.50	HK	HKD	Apr 1991
5	SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)	Yes	Ordinary Shares USD 0.50	HK	HKD	Apr 1991
HSBC	NYSE (New York Stock Exchange)		ADR EACH REPR 5 ORD USD0.50	US	USD	Apr 1991
HBC N	BMV (Bolsa Mexicana de Valores)		ADR EACH REPR 5 ORD USD0.50	MX	MXN	Apr 1991
HBC2	DB (Deutsche Boerse AG)		ADR EACH REPR 5 ORD USD0.50	DE	EUR	Apr 1991
HSBC	BASE (Buenos Aires Stock Exchange)		CEDEAR EACH REPR 0.5 ADR	AR	ARS	Jul 2001
H1SB34	BOVESPA (Bolsa de Valores de Sao Paulo)		BDR EACH 4 REPR 1 ADR	BR	BRL	Oct 2020

Data	Last Updated (UTC time)
Company Analysis	2022/10/02 00:00
End of Day Share Price	2022/09/30 00:00
Earnings	2022/06/30
Annual Earnings	2021/12/31