Berenberg raises target price on HSBC following Q2 earnings

2nd Aug 2022 12:48

(Sharecast News) - Analysts at Berenberg raised their target price on lender HSBC from 560.0p to 625.0p on Tuesday, stating the group's recent second-quarter earnings saw the company deliver "a clean enough sweep".

Berenberg said HSBC's Q2 earnings were "consistently strong", with revenues and costs 2% and 4% better than consensus expectations, respectively, while loan losses also remained "benign".

The German bank also noted that HSBC had achieved "robust revenue growth" in each of its main business lines and by 12% year-on-year overall.

"While our estimates largely captured HSBC's improved revenue guidance, we have become incrementally more confident in HSBC's ability to achieve this growth alongside stable costs," said the analysts.

"Moreover, weaknesses in HSBC's capital are cyclical, not structural, such that the bank's long-term capital return potential has, if anything, increased."

Berenberg reiterated its 'hold' rating on the stock.

Reporting by Iain Gilbert at Sharecast.com