HSBC (NYSE:HSBC) Shares Gap Down on Disappointing Earnings

HSBC Holdings plc (NYSE:HSBC) shares gapped down prior to trading on Tuesday after the company announced weaker than expected quarterly earnings. The stock had previously closed at $91.21, but opened at $85.55. HSBC shares last traded at $85.0820, with a volume of 828,608 shares changing hands.

The financial services provider reported $2.10 earnings per share for the quarter, missing analysts’ consensus estimates of $2.20 by ($0.10). The company had revenue of $18.68 billion during the quarter, compared to analyst estimates of $18.98 billion. HSBC had a net margin of 18.19% and a return on equity of 13.80%.

HSBC Dividend Announcement

The company also recently declared a quarterly dividend, which was paid on Friday, September 25th. Shareholders of record on Friday, August 14th were issued a $0.50 dividend. The ex-dividend date was Friday, August 14th. This represents a $2.00 annualized dividend and a yield of 2.3%. HSBC’s dividend payout ratio is presently 28.09%.

Key Stories Impacting HSBC

Here are the key news stories impacting HSBC this week:

• Positive Sentiment: Third-quarter profit before tax rose 32% year over year to $9.6 billion, supported by higher net interest income, lower expected credit losses and cost reductions. HSBC also announced a share buyback of up to $1 billion. HSBC’s third-quarter profit jumps 32%, in line with estimates
• Positive Sentiment: The bank declared a third interim dividend of $0.10 per share, representing a $1.71 billion payout and reinforcing its capital-return plans. HSBC declares USD 1.71bn third interim dividend
• Neutral Sentiment: HSBC’s earnings presentation highlighted its simplification and cost-cutting strategy, while the bank continues to refine client segmentation and consider combining Hang Seng’s investment arm with HSBC’s asset-management business. These actions could improve efficiency but offer limited immediate earnings relief. HSBC Holdings plc 2026 Q3 Results Earnings Call Presentation
• Negative Sentiment: Revenue of approximately $18.6 billion came in below the $18.98 billion consensus estimate, while reported EPS of $2.10 missed expectations of $2.20. The revenue shortfall outweighed the 32% profit increase for investors. HSBC quarterly earnings report
• Negative Sentiment: Customers are moving cash into higher-rate products, increasing HSBC’s funding costs and threatening net-interest margins. Slower wealth-management growth also added to concerns about future revenue momentum. Customers are chasing higher-rate products
• Negative Sentiment: Investors are also weighing the possibility of higher UK bank taxes, while broader weakness in European banking stocks amplified the negative reaction. Higher bank tax expected in budget

Analysts Set New Price Targets

A number of equities analysts have issued reports on the company. Royal Bank Of Canada reiterated a “sector perform” rating on shares of HSBC in a research note on Monday, August 17th. BNP Paribas Exane downgraded HSBC from a “hold” rating to a “strong sell” rating and decreased their price target for the stock from $100.50 to $97.00 in a report on Tuesday, August 4th. Shore Capital Group lowered HSBC to a “sell” rating in a research report on Wednesday, August 5th. Deutsche Bank Aktiengesellschaft restated a “neutral” rating on shares of HSBC in a research note on Wednesday, August 5th. Finally, Citigroup reiterated a “neutral” rating on shares of HSBC in a research note on Wednesday, September 23rd. Three analysts have rated the stock with a Buy rating, eleven have given a Hold rating and two have issued a Sell rating to the company. According to MarketBeat, HSBC has an average rating of “Hold” and a consensus target price of $97.00.

Institutional Investors Weigh In On HSBC

Hedge funds and other institutional investors have recently added to or reduced their stakes in the company. Bank of America Corp DE lifted its stake in shares of HSBC by 5.5% during the 1st quarter. Bank of America Corp DE now owns 2,385,883 shares of the financial services provider’s stock valued at $196,811,000 after buying an additional 124,201 shares in the last quarter. Royal Bank of Canada grew its stake in HSBC by 17.3% in the 1st quarter. Royal Bank of Canada now owns 1,304,192 shares of the financial services provider’s stock valued at $107,582,000 after buying an additional 192,133 shares in the last quarter. Quantinno Capital Management LP grew its stake in HSBC by 20.9% in the 1st quarter. Quantinno Capital Management LP now owns 525,775 shares of the financial services provider’s stock valued at $43,371,000 after buying an additional 90,711 shares in the last quarter. Renaissance Technologies LLC raised its holdings in HSBC by 391.6% during the 1st quarter. Renaissance Technologies LLC now owns 524,122 shares of the financial services provider’s stock valued at $43,235,000 after acquiring an additional 417,500 shares during the period. Finally, First Trust Advisors LP raised its holdings in HSBC by 1.4% during the 1st quarter. First Trust Advisors LP now owns 500,505 shares of the financial services provider’s stock valued at $41,287,000 after acquiring an additional 6,891 shares during the period. 1.48% of the stock is currently owned by institutional investors.

HSBC Trading Down 6.1%

The stock has a market cap of $293.55 billion, a PE ratio of 12.12, a P/E/G ratio of 0.88 and a beta of 0.58. The firm has a 50-day simple moving average of $100.05 and a 200-day simple moving average of $93.17. The company has a quick ratio of 0.92, a current ratio of 0.85 and a debt-to-equity ratio of 0.67.

About HSBC

HSBC Holdings plc is a global banking and financial services company headquartered in London. Its principal subsidiary, The Hongkong and Shanghai Banking Corporation, was established in 1865 to facilitate trade between Europe and Asia. HSBC’s shares trade on the New York Stock Exchange in the form of American depositary receipts under the symbol HSBC.

The company provides personal and wealth banking, commercial banking, corporate and institutional banking, investment banking, global markets, and asset management services.