[ET Net News Agency, 7 August 2020] Goldman Sachs lowered its target price for HSBC
Holdings (00005) to HK$50 from HK$55 and maintained its "buy" rating.
Factoring in the 2Q miss/trends, management guidance and the recent decline in HK
interest rates, the research house cut its 2020/21/22 EPS forecasts by 23%/8%/8%. Goldman
expects DPS starting in 2021 of US$0.40 (versus US$0.51 prior) but with buybacks to
neutralise the scrip (versus none previously).
Goldman expects 50-60bp higher CET 1 CAR versus the street over the next couple of
years, which translates into US$4-5bn in excess capital. This excess could be critical
next year when the research house believes HSBC will likely re-start its dividends. (KL)