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HSBC Shares Reach 52-Week High: Is There Further Upside Potential?
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Key Takeaways
HSBC shares reached a new 52-week high of $68.55, rising 13.6% in three months.
Expansion in Asia and restructuring moves aim to boost growth and efficiency.
Strong capital returns include $9.5B to shareholders and a $3B buyback plan.
HSBC Holdings PLC (HSBC - Free Report) shares touched a new 52-week high of $68.55 during Wednesday’s trading session. Over the past three months, the stock has risen 13.6%, underperforming the industry but outperforming the Zacks Finance sector and the S&P 500 index. However, HSBC stock has fared worse than its peers, UBS Group AG (UBS - Free Report) and Mitsubishi UFJ Financial Group, Inc. (MUFG - Free Report) , in the same time frame.
Three-Month Price Performance
Image Source: Zacks Investment Research
Does HSBC stock have more upside left despite showing recent strength in share price? Let us find out.
What’s Driving HSBC’s Performance?
Asia Expansion Strategy: HSBC has consistently undertaken measures to enhance its performance, with a focus on building operations in Asia. The company aims to become a top bank for high-net-worth and ultra-high-net-worth clients in the region. Over half of its business is now centered in Asia.
In India, HSBC re-launched its private banking business and obtained approval to open bank branches in 20 new cities. Last year, the company announced a partnership with Bajaj Allianz General Insurance in India to bolster its insurance solutions business.
In mainland China, HSBC is growing its wealth business through lifestyle-focused centers, acquisitions like Citigroup’s retail wealth arm, digital upgrades and talent hires.
HSBC has acquired 100% of the issued share capital of AXA Insurance in Singapore and L&T Investment Management Limited.
These initiatives are expected to help HSBC strengthen its position in the Asia markets, thus aiding bottom-line growth.
Restructuring Efforts: HSBC has been engaged in restructuring efforts to enhance operational efficiency. In February 2025, the company announced an initiative to streamline its organizational structure. HSBC aims to achieve $1.5 billion in annualized savings by the end of 2026.
The company will likely incur $1.8 billion in total severance and other upfront charges by the end of next year to execute its business simplification efforts. It also plans to reallocate an additional $1.5 billion of costs from non-strategic activities to priority growth areas over the medium term.
HSBC is winding down its mergers and acquisitions and equity capital markets operations in the U.K., Europe and the United States, while maintaining a more focused presence in Asia and the Middle East. It is also progressing with divestments in Germany, South Africa, Bahrain and France, and has begun a strategic review of its business in Malta.
Apart from these, HSBC completed the sale of its businesses in the United States, Canada, New Zealand, Greece, Russia, Argentina and Armenia, as well as retail banking operations in France and Mauritius.
Solid Capital Position: Despite the uncertain macroeconomic environment, HSBC’s capital position remains solid. As of June 30, 2025, the company’s capital ratios were strong, driven by steady capital generation.
Given the solid capital position and lower debt-equity ratio than the industry, the company has been rewarding its shareholders consistently. In the first half of 2025, the bank returned $9.5 billion to the shareholders through dividends and repurchases. The company expects a dividend payout ratio of 50% for 2025. Further, it intends to initiate a share repurchase program of up to $3 billion, which will likely be completed by October 2025.
Bullish Analyst Sentiments for HSBC
Over the past 60 days, the Zacks Consensus Estimate for 2025 and 2026 earnings of $6.98 and $7.02, respectively, has been revised 3.1% and 4.8% upward.
Estimate Revision Trend
Image Source: Zacks Investment Research
The projected figures imply a year-over-year rise of 7.4% and 0.6% in 2025 and 2026, respectively.
HSBC Stock is Undervalued
HSBC’s 12-month forward price-to-earnings (P/E) of 9.76X is below the industry’s 10.12X. This indicates that its shares are trading at a discount.
Forward 12-Month P/E Ratio
Image Source: Zacks Investment Research
Meanwhile, UBS Group has a forward 12-month P/E of 14.12X, while Mitsubishi UFJ Financial is trading at 12.02X. This implies that HSBC is cheaper than UBS Group and Mitsubishi UFJ Financial.
Here’s What’s Hurting HSBC’s Growth
Rising Expense Base: Over the years, HSBC has undertaken several measures to improve efficiency by divesting/closing non-core businesses. Driven by these efforts, the bank was able to control expenses in the past.
However, operating expenses increased in 2024 and in the first six months of 2025. Operating expenses are expected to remain elevated in the near term, given the company’s focus on growing market share in the U.K. and Asia, as well as strengthening digital capabilities globally. HSBC expects target-based operating expenses to increase 3% in 2025.
Muted Revenue Growth: Revenue generation at HSBC has been subdued over the past several quarters. While the interest rate environment across the world has improved, the financial impacts of the challenging macroeconomic backdrop continue to weigh on the company’s top-line growth.
Though revenues were stable in 2024 and increased in 2023, the metric recorded a negative compound annual growth rate of 2.7% over the three years ended 2022. Further, in the first six months of 2025, revenues declined. Not-so-impressive loan demand and a tough macroeconomic environment in many of its markets are major headwinds.
Revenue Trend
Image Source: Zacks Investment Research
How to Approach HSBC Stock Now
Supported by its business simplification efforts, along with a strong capital position and a solid global network, HSBC is well-positioned for growth.
However, rising operating expenses amid growth initiatives will likely hurt HSBC’s bottom line. Muted revenues, given subdued loan demand and a challenging operating backdrop, remain another concern.
Nonetheless, HSBC’s efforts to expand in Asia will aid profitability in the near term. Also, bullish analyst sentiments and an attractive valuation are positives. Thus, HSBC remains a lucrative bet at the moment for investors.
Image: Bigstock
HSBC Shares Reach 52-Week High: Is There Further Upside Potential?
Key Takeaways
HSBC Holdings PLC (HSBC - Free Report) shares touched a new 52-week high of $68.55 during Wednesday’s trading session. Over the past three months, the stock has risen 13.6%, underperforming the industry but outperforming the Zacks Finance sector and the S&P 500 index. However, HSBC stock has fared worse than its peers, UBS Group AG (UBS - Free Report) and Mitsubishi UFJ Financial Group, Inc. (MUFG - Free Report) , in the same time frame.
Three-Month Price Performance
Image Source: Zacks Investment Research
Does HSBC stock have more upside left despite showing recent strength in share price? Let us find out.
What’s Driving HSBC’s Performance?
Asia Expansion Strategy: HSBC has consistently undertaken measures to enhance its performance, with a focus on building operations in Asia. The company aims to become a top bank for high-net-worth and ultra-high-net-worth clients in the region. Over half of its business is now centered in Asia.
In India, HSBC re-launched its private banking business and obtained approval to open bank branches in 20 new cities. Last year, the company announced a partnership with Bajaj Allianz General Insurance in India to bolster its insurance solutions business.
In mainland China, HSBC is growing its wealth business through lifestyle-focused centers, acquisitions like Citigroup’s retail wealth arm, digital upgrades and talent hires.
HSBC has acquired 100% of the issued share capital of AXA Insurance in Singapore and L&T Investment Management Limited.
These initiatives are expected to help HSBC strengthen its position in the Asia markets, thus aiding bottom-line growth.
Restructuring Efforts: HSBC has been engaged in restructuring efforts to enhance operational efficiency. In February 2025, the company announced an initiative to streamline its organizational structure. HSBC aims to achieve $1.5 billion in annualized savings by the end of 2026.
The company will likely incur $1.8 billion in total severance and other upfront charges by the end of next year to execute its business simplification efforts. It also plans to reallocate an additional $1.5 billion of costs from non-strategic activities to priority growth areas over the medium term.
HSBC is winding down its mergers and acquisitions and equity capital markets operations in the U.K., Europe and the United States, while maintaining a more focused presence in Asia and the Middle East. It is also progressing with divestments in Germany, South Africa, Bahrain and France, and has begun a strategic review of its business in Malta.
Apart from these, HSBC completed the sale of its businesses in the United States, Canada, New Zealand, Greece, Russia, Argentina and Armenia, as well as retail banking operations in France and Mauritius.
Solid Capital Position: Despite the uncertain macroeconomic environment, HSBC’s capital position remains solid. As of June 30, 2025, the company’s capital ratios were strong, driven by steady capital generation.
Given the solid capital position and lower debt-equity ratio than the industry, the company has been rewarding its shareholders consistently. In the first half of 2025, the bank returned $9.5 billion to the shareholders through dividends and repurchases. The company expects a dividend payout ratio of 50% for 2025. Further, it intends to initiate a share repurchase program of up to $3 billion, which will likely be completed by October 2025.
Bullish Analyst Sentiments for HSBC
Over the past 60 days, the Zacks Consensus Estimate for 2025 and 2026 earnings of $6.98 and $7.02, respectively, has been revised 3.1% and 4.8% upward.
Estimate Revision Trend
Image Source: Zacks Investment Research
The projected figures imply a year-over-year rise of 7.4% and 0.6% in 2025 and 2026, respectively.
HSBC Stock is Undervalued
HSBC’s 12-month forward price-to-earnings (P/E) of 9.76X is below the industry’s 10.12X. This indicates that its shares are trading at a discount.
Forward 12-Month P/E Ratio
Image Source: Zacks Investment Research
Meanwhile, UBS Group has a forward 12-month P/E of 14.12X, while Mitsubishi UFJ Financial is trading at 12.02X. This implies that HSBC is cheaper than UBS Group and Mitsubishi UFJ Financial.
Here’s What’s Hurting HSBC’s Growth
Rising Expense Base: Over the years, HSBC has undertaken several measures to improve efficiency by divesting/closing non-core businesses. Driven by these efforts, the bank was able to control expenses in the past.
However, operating expenses increased in 2024 and in the first six months of 2025. Operating expenses are expected to remain elevated in the near term, given the company’s focus on growing market share in the U.K. and Asia, as well as strengthening digital capabilities globally. HSBC expects target-based operating expenses to increase 3% in 2025.
Muted Revenue Growth: Revenue generation at HSBC has been subdued over the past several quarters. While the interest rate environment across the world has improved, the financial impacts of the challenging macroeconomic backdrop continue to weigh on the company’s top-line growth.
Though revenues were stable in 2024 and increased in 2023, the metric recorded a negative compound annual growth rate of 2.7% over the three years ended 2022. Further, in the first six months of 2025, revenues declined. Not-so-impressive loan demand and a tough macroeconomic environment in many of its markets are major headwinds.
Revenue Trend
Image Source: Zacks Investment Research
How to Approach HSBC Stock Now
Supported by its business simplification efforts, along with a strong capital position and a solid global network, HSBC is well-positioned for growth.
However, rising operating expenses amid growth initiatives will likely hurt HSBC’s bottom line. Muted revenues, given subdued loan demand and a challenging operating backdrop, remain another concern.
Nonetheless, HSBC’s efforts to expand in Asia will aid profitability in the near term. Also, bullish analyst sentiments and an attractive valuation are positives. Thus, HSBC remains a lucrative bet at the moment for investors.
HSBC currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.