HSBC Holdings (HSBA.L)
Financials · LSE · UK
Fundamentals
Valuation and ratings
HSBC Holdings trades at £14.94, which is 45% above the £8.20 our discounted cash flow model puts on the business. On that measure it screens as expensive, which is not the same as saying it will fall.
Our moat model scores it 66 out of 100, which is a moat, but not a deep one. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.
It changes hands at 16.0 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.
About HSBC Holdings
HSBC Holdings plc engages in the provision of banking and financial products and services worldwide. It operates through four segments: Hong Kong, UK, Corporate and Institutional Banking, and International Wealth and Premier Banking. The Hong Kong segment is involved in the retail banking and wealth and commercial banking of HSBC Hong Kong and Hang Seng Bank. The UK segment engages in UK retail banking and wealth, as well as first direct and M&S Bank, UK Commercial Banking, and HSBC Innovation Bank. The Corporate and Institutional Banking segment is involved in transaction banking and capital markets. The International Wealth and Premier Banking segment is involved in the business comprising premier banking outside of Hong Kong and the UK, its private bank, asset management, and insurance businesses. The company was founded in 1865 and is headquartered in London, the United Kingdom.
HSBA.L passes 6 of our 30 screens today
Each screen prints the exact criteria it used, and the circumstances in which it is wrong.
Common questions
Is HSBC Holdings (HSBA.L) undervalued?
Against our discounted cash flow estimate of £8.20, HSBA.L at £14.94 is 45% above fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.
What is HSBA.L's P/E ratio?
HSBA.L trades at 16.0 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.
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Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.