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What Is HSBC Holdings plc’s (LON:HSBA) Share Price Doing?

HSBC Holdings plc (LON:HSBA) saw significant share price volatility over the past couple of months on the LSE, rising to the highs of £7.46 and falling to the lows of £6.62. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether HSBC Holdings’s current trading price of £7.25 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at HSBC Holdings’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. View out our latest analysis for HSBC Holdings

What’s the opportunity in HSBC Holdings?

HSBC Holdings appears to be overvalued by 73.54% at the moment, based on my discounted cash flow valuation. The stock is currently priced at UK£7.25 on the market compared to my intrinsic value of £4.18. Not the best news for investors looking to buy! In addition to this, it seems like HSBC Holdings’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to fall back down to an attractive buying range, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.

Can we expect growth from HSBC Holdings?

LSE:HSBA Future Profit June 24th 18
LSE:HSBA Future Profit June 24th 18

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. HSBC Holdings’s earnings over the next few years are expected to increase by 69.78%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? HSBA’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe HSBA should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

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Are you a potential investor? If you’ve been keeping tabs on HSBA for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for HSBA, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on HSBC Holdings. You can find everything you need to know about HSBC Holdings in the latest infographic research report. If you are no longer interested in HSBC Holdings, you can use our free platform to see my list of over 50 other stocks with a high growth potential.


To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.