BofA stays at 'buy' on HSBC after guidance for stronger than expected 2023 dividend

Analysts at Bank of America nudged their target price for shares of HSBC higher, from 751.0p to 760.0p, and reiterated their 'buy' recommendation after the lender guided towards a larger-than-expected dividend payout in 2023.

Banks

4,677.17

15:45 15/11/24

1.24%

57.25

FTSE 100

8,060.61

15:45 15/11/24

n/a

FTSE 350

4,453.56

15:45 15/11/24

n/a

FTSE All-Share

4,411.85

15:45 15/11/24

n/a

HSBC Holdings

717.50p

15:45 15/11/24

1.60%

11.30p

HSBC's new guidance for a dividend payout of 50% in 2023, together with a return on tangible equity of 12% for that year implied a payout of 48 US cents per share or 25% more than anticipated by the consensus, they explained.

The new guidance on dividends came alongside better-than-expected underlying profits, revenues, costs and impairments.

Furthermore, after raising their estimates for HSBC's earnings per share in 2022 and 2023 by 30% and 10%, respectively, the lender's shares were left trading on a price-to-earnings multiple of 6.4 for 2023 - their lowest level for at least three decades.