[ET Net News Agency, 22 February 2021] BofA Global Research lifted its target price for
HSBC Holdings (00005) to HK$45.57 from HK$43.01, driven by higher 2023 earnings, with
additional sterling strength emphasising the underlying upgrade. It reiterated its
"neutral" rating.
The research house sees HSBC with US$1.5bn of 4Q 2020 earnings and a Common Equity Tier
1 of 15.3% - above its target range. BofA sees the dividend reinstated at US$0.12 and
noted that the Bank of England likely caps this dividend around US$0.15. Recent
significant rises in market pricing for US$ and GBP policy rates in the outer years drive
its 2023 PBT forecasts up by 5% for this very rate-sensitive group.
BofA sees a focus on capital discipline, with associated exit costs, enabling a 33%
dividend CAGR 2021-22, before enabling a significant step-up in distributions
post-restructuring. (KL)