HSBC (NYSE:HSBC) Sets New 12-Month High - Still a Buy?

Key Points

• HSBC shares hit a new 52-week high, trading as high as $95.79 and recently near $95.92, reflecting strong recent momentum in the stock.
• Recent company developments were largely positive, including a multi-year Google Cloud AI partnership aimed at 200 use cases and more than $100 million in expected productivity gains, plus progress on a potential sale of its Singapore insurance business.
• Despite the rally, Wall Street remains cautious overall: HSBC’s consensus analyst rating is Hold, and the stock also carries a modest 2.1% dividend yield with a payout ratio of 32.46%.

Shares of HSBC Holdings plc (NYSE:HSBC - Get Free Report) hit a new 52-week high during trading on Wednesday . The stock traded as high as $95.79 and last traded at $95.9150, with a volume of 25211 shares. The stock had previously closed at $94.45.

Key HSBC News

Here are the key news stories impacting HSBC this week:

• Positive Sentiment: HSBC announced a multi-year partnership with Google Cloud to expand artificial intelligence usage, targeting 200 AI use cases and expected productivity/returns of more than $100 million. This suggests management is investing in efficiency gains and long-term cost savings. HSBC partners with Google Cloud to expand AI usage
• Positive Sentiment: HSBC is reportedly close to choosing a buyer for its Singapore insurance business, with Allianz leading the process in a deal that could value the unit at up to $2 billion. A sale would likely free up capital and sharpen the bank’s strategic focus. HSBC Close to Picking Buyer for Singapore Insurance Business
• Positive Sentiment: HSBC introduced a new trade finance tool, HSBC TradeCash, to help customers access working capital faster by borrowing against invoice data. The move reinforces HSBC’s push to grow fee-based and transaction banking services. HSBC Intros Tool to Speed Access to Working Capital
• Neutral Sentiment: HSBC said it did not conduct price stabilisation activities on its Zurich Finance USD 500 million bond issue. This appears to be a routine capital-markets disclosure with limited direct impact on the stock. HSBC Reports No Stabilisation on Zurich Finance USD 500 Million Bond
• Negative Sentiment: Reports that HSBC’s Hong Kong mobile banking service experienced another glitch and required restoration could raise concerns about service reliability, though the issue appears to have been fixed quickly. HSBC says Hong Kong mobile banking services restored after access issues

Analysts Set New Price Targets

HSBC has been the subject of several research reports. Zacks Research downgraded shares of HSBC from a "strong-buy" rating to a "hold" rating in a research report on Tuesday, May 5th. Weiss Ratings lowered shares of HSBC from a "hold (c+)" rating to a "hold (c)" rating in a research note on Wednesday, May 6th. The Goldman Sachs Group started coverage on HSBC in a report on Thursday, March 26th. They set a "buy" rating for the company. BNP Paribas Exane downgraded HSBC from an "outperform" rating to a "neutral" rating in a research note on Tuesday, April 14th. Finally, Royal Bank Of Canada reaffirmed a "sector perform" rating on shares of HSBC in a research report on Thursday, May 14th. Five equities research analysts have rated the stock with a Buy rating and six have assigned a Hold rating to the company. According to data from MarketBeat, HSBC has a consensus rating of "Hold".

HSBC Price Performance

The stock has a market capitalization of $330.67 billion, a P/E ratio of 15.78, a price-to-earnings-growth ratio of 0.83 and a beta of 0.56. The company has a debt-to-equity ratio of 0.52, a current ratio of 0.92 and a quick ratio of 0.92. The company's 50-day simple moving average is $90.86 and its 200-day simple moving average is $85.14.

HSBC (NYSE:HSBC - Get Free Report) last announced its quarterly earnings data on Tuesday, March 31st. The financial services provider reported $0.44 EPS for the quarter. HSBC had a net margin of 16.06% and a return on equity of 13.35%. The company had revenue of $19.13 billion during the quarter. As a group, sell-side analysts expect that HSBC Holdings plc will post 8.6 EPS for the current fiscal year.

HSBC Cuts Dividend

The firm also recently disclosed a quarterly dividend, which will be paid on Friday, June 26th. Shareholders of record on Friday, May 15th will be paid a $0.50 dividend. The ex-dividend date is Friday, May 15th. This represents a $2.00 annualized dividend and a yield of 2.1%. HSBC's dividend payout ratio is currently 32.46%.

Insider Activity at HSBC

In related news, insider Daniel Scott Palomaki sold 23,123 shares of the business's stock in a transaction that occurred on Thursday, May 7th. The stock was sold at an average price of $18.11, for a total transaction of $418,757.53. Following the transaction, the insider directly owned 4,973 shares of the company's stock, valued at approximately $90,061.03. The trade was a 82.30% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Corporate insiders own 0.01% of the company's stock.

Hedge Funds Weigh In On HSBC

Several institutional investors and hedge funds have recently modified their holdings of HSBC. Fisher Asset Management LLC boosted its holdings in shares of HSBC by 2.3% during the 4th quarter. Fisher Asset Management LLC now owns 17,800,748 shares of the financial services provider's stock worth $1,400,385,000 after buying an additional 402,288 shares during the period. Dimensional Fund Advisors LP raised its holdings in HSBC by 1.8% in the 3rd quarter. Dimensional Fund Advisors LP now owns 10,575,644 shares of the financial services provider's stock valued at $750,659,000 after acquiring an additional 185,073 shares during the period. Morgan Stanley lifted its position in HSBC by 15.3% during the fourth quarter. Morgan Stanley now owns 7,483,883 shares of the financial services provider's stock worth $588,757,000 after acquiring an additional 993,473 shares during the last quarter. Northern Trust Corp boosted its holdings in shares of HSBC by 4.7% during the third quarter. Northern Trust Corp now owns 3,045,134 shares of the financial services provider's stock worth $216,144,000 after acquiring an additional 136,342 shares during the period. Finally, Bank of America Corp DE grew its position in shares of HSBC by 5.5% in the first quarter. Bank of America Corp DE now owns 2,385,883 shares of the financial services provider's stock valued at $196,811,000 after purchasing an additional 124,201 shares during the last quarter. 1.48% of the stock is currently owned by institutional investors and hedge funds.

HSBC Company Profile

HSBC Holdings plc NYSE: HSBC is a multinational banking and financial services organization headquartered in London. It traces its origins to the Hongkong and Shanghai Banking Corporation, founded in 1865 to facilitate trade between Europe and Asia, and has since grown into one of the world's largest banking groups. The company is publicly listed in multiple markets, including the London Stock Exchange, the Hong Kong Stock Exchange and as an American depositary receipt on the New York Stock Exchange.

HSBC operates a universal banking model, serving retail, commercial, corporate and institutional clients.

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