HSBC shares are still in a bullish market, and hovering around their all-time highest price as investors keep an eye on the job losses and upcoming earnings. HSBA shares have risen for three weeks in a row, almost 300% since their lowest point in 2020. What’s next for HSBC?
HSBC continues to boost efficiency
HSBC’s share price remained stable as Georges Elhedery continued to improve the efficiency of the company under his leadership.
Bloomberg reports that the company will be announcing more cuts to its staff, mainly in its Investment Bank division. The company has already begun some of the cuts in Asia. However, it expects them to be accelerated in the coming months.
The management has taken additional steps to increase efficiency. The management has reduced the size of its committee, and merged its global and commercial banking divisions.
The management has taken other steps in recent years to improve the performance of markets, such as exiting non-profitable ones. HSBC is no longer in top markets like Canada, United States of America, Argentina and France.
HSBC Earnings ahead
Next week, on the 19th of next month, HSBC will release its earnings. Analysts expect that pre-tax profits will reach $31.7 billion. This is a 4.6% rise from last year.
HSBC reported that its profit before taxes (PBT), which is a measure of profits, increased by 11 percent to $8.4 billion during the third quarter. The bank’s revenues jumped up to $17 billion, while its loan growth was stable.
The majority of the company’s revenue was derived from its net interest income, which fell to $10.61 billion. This was due to a $300m loss from early redemptions of legacy securities.
This decline has been partially offset by a rise in fees and other revenue, which has increased to $6.4 billion.
HSBC uses its surplus capital to give it back to investors. This trend may continue for the next few years due to its high CET1 ratio. This ratio, which is based on its risk-weighted asset, has increased from 15.2% in Q3’23. The CET1 ratio is being actively reduced by most banks. HSBC hopes to have a dividend payout rate of about 50% by 2024. Recently, it announced a buyback of $3 billion.
HSBC share price forecast
TradingView HSBA Stock
Weekly chart of HSBC shows it has had a very strong upward trend in recent months. Recently, it moved over the top of the black ascending channel.
HSBC’s stock price has crossed above its 50-week Exponential moving average (EMA). The Relative Strength Index has also moved up to 85, which is the highest level in recent years. This is an indication that the market has been overbought.
Also, the Percentage Price Oscillator has reached its highest level in many years. The stock could see a short pullback, and then retesting the top of the ascending channels. This retreat is part of the break-and-retest, which is a common continuation signal. The HSBC stock price is expected to rise and reach 1,000p in the future.
The post HSBC Share Price Forecast ahead of Earnings: Buy or Sell? This post may be updated as new information unfolds.
