The HSBC Holdings (LSE:HSBA) share price has been on a solid upward trajectory over the last 12 months. But when compared to other London-listed banks, shareholders have seemingly been getting left behind. HSBC shares have enjoyed a 16% rally since May 2024. But at the same time, Standard Chartered‘s up 40%, Barclays‘ 42%, Lloyds‘ 35%, and NatWest‘s leading the pack at 52%.
Sixteen percent is certainly nothing to scoff at. After all, it’s double what the FTSE 100 typically generates in a year. But it still begs the question as to why HSBC has lagged behind and whether its fate will change.
What’s going on at HSBC?
There are a variety of factors at play influencing the bank’s performance. For the most part, its operations are concentrated in Asia, in particular China. However, a combination of a new US-China trade war paired with property market concerns has hampered investor sentiment.
This Asia-focused approach also means that HSBC hasn’t benefited as much from the rise of interest rates. The other previously mentioned banks have seen their net interest margins expand as the Bank of England hiked rates to combat inflation. But in China, rates have been on a downward trajectory since 2019 in response to slowing economic growth and rising defaults in its real estate sector.
What are the experts saying?
Despite these headwinds, analysts’ opinions of HSBC seem to be relatively positive. They’re essentially divided 50/50 between Hold and Buy recommendations. But when it comes to the price forecasts, the average consensus suggests the HSBC share price is due for further growth.
| Analyst | 12-Month Share Price Forecast |
| RBC Capital | 900p |
| JPMorgan Chase | 1,100p |
| UBS | 1,150p |
| Credit Suisse | 1,180p |
| Barclays | 1,200p |
Right now, Barclays has the highest conviction among analysts. And if its 1,200p price target proves accurate, then a £5,000 investment today could be worth £7,177 by this time next year.
Bull versus bear
What’s driving the positive outlook from Barclays? A big factor is simply valuation. HSBC shares are trading at an attractive price-to-tangible-net-asset-value ratio of 1.29 despite the return on tangible equity expected to climb over 17% by 2027. At the same time, stimulative economic policy in China seems to be bearing fruit with GDP growth in the first quarter of 2025 beating expectations at 5.4%.
However, Barclays has also highlighted that this economic boost might not last, given the new trade war with America. While trade negotiations are now seemingly underway, there’s no guarantee a deal will be reached. And triple-digit tariffs could significantly impact HSBC’s core market.
The bottom line
The strong growth potential of the HSBC share price is intriguing, especially given its fairly modest valuation today. However, this is ultimately tied to geopolitical and macroeconomic factors that are out of management’s control. So while there could be an opportunity for investors to make money here, there are far better avenues to consider exploring for double-digit gains. At least that’s what I think.
