Goldman Sachs: Raises HSBC HOLDINGS (00005) target price to HK$193, expects US$1.5 billion in buybacks in the third quarter.

Goldman Sachs released a research report stating that HSBC HOLDINGS (00005) reported a basic pre-tax profit of $10.3 billion in the third quarter, exceeding the market expectations prepared by the company but roughly in line with Goldman Sachs forecasts. Non-net interest income outperformed expectations, costs met expectations, and provisions were slightly below expectations. Goldman Sachs raised the target price for HSBC's London shares from 1,752 pence to 1,860 pence, and for its Hong Kong stock from HK$181 to HK$193, mainly reflecting changes in forecasts. The rating is maintained at Buy. The report indicates that while investors are focusing on operating expense outlooks, the bank believes that managements message is constructive. Management reiterated that incremental operating expenses will depend on a stronger operating environment while maintaining discipline over the bank's day-to-day operating costs. Given the favorable interest rate environment, sustained momentum in fee income, and overall stability in asset quality, the bank believes the earnings outlook remains supportive into the second half of 2026. For 2027, the bank assumes a 5% increase in base costs, partially offset by approximately $500 million in simplification savings, leading to a 0.5% to 2% upward adjustment in the pre-tax profit forecasts for 2026 to 2029. It is also projected that buybacks will amount to $1.5 billion in the third quarter of 2026 and $2 billion in the fourth quarter.