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.
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.
