HSBC share price remains in a strong bull market and is hovering at its all-time high as investors watch the ongoing job cuts and the upcoming earnings. HSBA stock has risen in the last three straight weeks, and by almost 300% from its lowest level in 2020. So, what next for the HSBC stock price?
HSBC is still boosting efficiency
HSBC share price held steady as the management continued to boost its efficiency under Georges Elhedery, the new chief executive.
According to Bloomberg, the management will announce more job cuts, mostly in its investment bank division. Some of these cuts, mostly in Asia, have already started, but the company expects to supercharge them in the next few months.
Management has already taken further action to improve efficiency. It has reduced its management committee and combined its commercial and global banking divisions.
These actions are on top of the management’s other actions in the past few years, including exiting unprofitable markets. HSBC has exited top countries like Canada, United States, Argentina, and France.
HSBC earnings ahead
The next key catalyst for the HSBC share price will be the upcoming earnings, which are scheduled on 19th next week. Analysts anticipate that the pre-tax profit will be $31.7 billion, a 4.6% increase from the previous year.
The most recent results showed that HSBC’s profit before tax (PBT) rose by 11% to $8.5 billion in the third quarter. Its revenue jumped to $17 billion as its loan growth remained stable.
Most of its revenue came from the net interest income (NII), which dropped to $10.6 billion. The decline was because of a $300 million loss on early redemption of legacy securities.
The decline was partially offset by an increase in its fee and other income whose revenue rose to $6.4 billion.
HSBC is using its excess capital to return it to investors, a trend that may continue in the coming years because of its strong CET1 ratio. The ratio, which looks at its risk-weighted assets, has jumped to 15.2% from Q3’23. Most banks are actively reducing their CET1 ratio. HSBC hopes that its dividend payout ratio will be about 50% in 2024. It recently announced a $3 billion buyback.
HSBC share price forecast
HSBA stock by TradingView
The weekly chart shows that the HSBC stock price has been in a strong uptrend in the past few months. It recently moved above the upper side of the ascending channel shown in black.
HSBC stock has moved above the 50-week Exponential Moving Average (EMA). Further, the Relative Strength Index (RSI) has moved to the overbought level of 85, the highest swing in years. That is a sign that it has become highly overbought.
The Percentage Price Oscillator (PPO) has also jumped to the highest point in years. Therefore, the stock may see a brief pullback and retest the upper side of the ascending channel. That retreat will be part of a break-and-retest pattern, a popular continuation sign. In the long-term, the HSBC share price will jump and get to 1,000p.
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