HSBC (HSBC, $41.36) misses 2018 expectations, gears up for 2019
London headquartered HSBC, Europe’s largest bank, recently published its full-year report revealing several forecast misses primarily due to a challenging fourth quarter.
The bank’s pre-tax profit for 2018 stood at $19.89 billion, 15.9% higher than the previous year, versus a forecast of a 23.8% jump to $21.26 billion. Reported revenue was 4.5% higher than 2017 to $53.78 billion versus a forecast of 6.28% higher to $54.674 billion.
Other financial metrics include: Net interest margin, a measure of lending profitability, stood at 1.66% as of December 31, 2018 – higher than the 1.63% seen in 2017; earnings per share for 2018 was $0.63 compared to $0.48 in 2017; and common equity tier 1 ratio — a proportion of the bank's core capital to assets — as on December 31 2018 stood at 14 % compared to 14.5% at end-2017. The bank’s Hong Kong listed shares also fell by 2% on Tuesday. It also missed its positive revenue ‘jaws’ target for 2018 recorded at minus 1.2%.
Despite these results, the bank’s CFO is satisfied, as the last quarter was particularly challenging which led to trading revenue losses in many banking groups. He is optimistic for 2019 as the bank is well-prepared for any outcome related to Brexit, and is yet to experience any dramatic slowdown in its business in China as a result of trade disputes between Washington and Beijing. However, wealth management strategists consider exactly these factors to become headwinds for the bank ahead in the market.
HSBC in -4.23% downward trend, declining for three consecutive days on October 08, 2024
Moving lower for three straight days is viewed as a bearish sign. Keep an eye on this stock for future declines. Considering data from situations where HSBC declined for three days, in of 265 cases, the price declined further within the following month. The odds of a continued downward trend are .
Technical Analysis (Indicators)
Bearish Trend Analysis
The Stochastic Oscillator entered the overbought zone. Expect a price pull-back in the foreseeable future.
The Moving Average Convergence Divergence Histogram (MACD) for HSBC turned negative on October 08, 2024. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 36 similar instances when the indicator turned negative. In of the 36 cases the stock turned lower in the days that followed. This puts the odds of success at .
HSBC broke above its upper Bollinger Band on October 28, 2024. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on October 22, 2024. You may want to consider a long position or call options on HSBC as a result. In of 91 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where HSBC advanced for three days, in of 313 cases, the price rose further within the following month. The odds of a continued upward trend are .
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 45, placing this stock slightly better than average.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to consistent earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating fairly steady price growth. HSBC’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (0.804) is normal, around the industry mean (0.958). P/E Ratio (6.896) is within average values for comparable stocks, (8.937). Projected Growth (PEG Ratio) (0.601) is also within normal values, averaging (2.643). Dividend Yield (0.078) settles around the average of (0.054) among similar stocks. P/S Ratio (2.445) is also within normal values, averaging (2.460).
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a major bank
Industry MajorBanks