{"id":96804,"date":"2026-08-04T03:23:12","date_gmt":"2026-08-04T03:23:12","guid":{"rendered":"https:\/\/www.europesays.com\/britain\/96804\/"},"modified":"2026-08-04T03:23:12","modified_gmt":"2026-08-04T03:23:12","slug":"hsbcs-record-breaking-stock-rally-faces-test-from-earnings","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/britain\/96804\/","title":{"rendered":"HSBC\u2019s record-breaking stock rally faces test from earnings"},"content":{"rendered":"

This Oct 25, 2024, photo shows a pedestrian passing by the HSBC Holdings Plc headquarters building in Hong Kong. (PHOTO \/ BLOOMBERG)<\/p>\n

A surge in HSBC Holdings Plc\u2019s shares to a record has raised the bar for the Asia-focused lender to deliver results that can help sustain the rally, with investors focused on capital returns, buyback prospects and the outlook, according to Bloomberg.<\/p>\n

The bank is expected to report a pretax profit of $9.51 billion for the June quarter on Tuesday, according to the average of estimates compiled by it, and about $9.7 billion based on figures compiled by Bloomberg. Firmer rates, resilient loan demand and improving asset quality could offset incipient pressure from mortgages and cross-border wealth restrictions, according to Bloomberg Intelligence.<\/p>\n

Shares of HSBC, which derives the bulk of its earnings from Asia, climbed to an all-time high on Friday, helped by a broad recent sector rotation into Hong Kong-listed financial stocks from high-flying technology names. Up more than 37 percent in 2026, they are the top performers on the Hang Seng Index\u2019s sub-gauge, and also among the biggest winners on the city\u2019s broader benchmark.<\/p>\n

\u201cHSBC\u2019s robust 1Q momentum likely carried into 2Q, with higher Hibor, up 20-30 bps in the period, underpinning May\u2019s banking net interest income guidance upgrade to about $46 billion,\u201d BI analysts Tomasz Noetzel and Lento Tang wrote in a recent note.<\/p>\n

The London-headquartered lender has been on a major restructuring drive since Georges Elhedery<\/a> took over as chief executive officer in September 2024. The Lebanon-born banker has shut down, merged and sold several businesses in an effort to simplify the bank\u2019s business and reduce costs.<\/p>\n

<\/p>\n

Analysts at JPMorgan Chase & Co expect the bank\u2019s second-quarter earnings growth to be supported primarily by net interest income and improved operating leverage. They forecast revenue growth of about 6 percent from a year earlier, driven mainly by banking net interest income growth of roughly 8 percent.<\/p>\n

HSBC\u2019s estimated price-to-book ratio climbed to 1.89 on Friday, the highest since late 2007, and more than double its average over the past decade, according to data compiled by Bloomberg.<\/p>\n

ALSO READ: HSBC expects over $100m gains from using Google AI tools<\/a><\/p>\n

The elevated valuation leaves less room for disappointment and has sharpened the market\u2019s focus on buyback prospects. The stock is expected to drop 3.8 percent over the next 12 months, based on a compilation of sell-side analysts\u2019 price targets.<\/p>\n

\u201cStrong 2Q profitability and organic capital generation mean HSBC is likely to resume share buybacks,\u201d according to the BI analysts.<\/p>\n

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