Deutsche Bank downgraded HSBC (LON: HSBA) from Buy to Hold in a note this week, citing a lack of further value after the stock’s significant rise.
The bank also raised its price target to 910p from 830p but warned that HSBC’s potential for further upside is now limited, with its value “no longer there.”
The note highlights that while HSBC may implement some restructuring, any changes are expected to be “relatively small” and focused on maintaining return on tangible equity in a challenging rate environment.
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Deutsche Bank believes that if restructuring remains contained, HSBC’s capital return expectations could stay intact, which has been one of the key attractions for investors.
However, with shares having already gained substantially, Deutsche Bank now argues that HSBC’s valuation no longer presents a compelling opportunity.
HSBC shares are up more than 32% in the last 12 months.
The downgrade comes as HSBC pushes forward with its strategy to scale back investment banking operations in Europe and the Americas, prioritising growth in Asia and the Middle East.
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