Goldman Sachs upgrades HSBC to 'buy'

10th Mar 2015 07:34

Recent strength in US interest rates, together with opportunities to streamline some of its less profitable operations, should act as catalysts for shares in the world's local bank, HSBC.That was the opinion of analysts at Goldman Sachs who upgraded their view on shares of HSBC to 'buy' from 'neutral'.In regards to potential efficiency gains, the broker pointed out how the bulk of profitability now accrues from the bank's Asian assets.In a note dated 9 March, analyst Martin Leitgeb lifted his 12-month target price on the stock by 1% to 740p."In our view there exists scope for value accretive streamlining - particularly, once the new regulatory-driven costs of size are considered. HSBC referenced Brazil and Mexico when discussing areas of restructuring focus on the FY14 call," he said.The lender's current valuation of one times book value should provide valuation support, Goldman added.