<div id="readability-page-1"><div><p>HSBC Holdings (LSE:HSBA) has quietly built momentum this year, with the share price up roughly 42% year to date and total return near 55% over the past year, outpacing many global banks.</p> <p>See our latest analysis for HSBC Holdings.</p> <p>That run has been underpinned by solid earnings momentum and rising profitability, with the latest 90 day share price return of 9.56% and a three year total shareholder return of 175.93% suggesting bullish sentiment is still building around the $11.118 stock.</p> <p>If HSBC’s rally has you thinking beyond big banks, it could be a good moment to see what else is gaining traction via fast growing stocks with high insider ownership.</p> <p>Yet with the shares now trading above analyst targets but still showing a hefty intrinsic discount, the key question is whether HSBC remains undervalued or if the market is already pricing in its next phase of growth.</p> <h2>Most Popular Narrative: 4.7% Overvalued</h2> <p>With HSBC Holdings last closing at £11.12 against a narrative fair value of about £10.62, the current share price already runs ahead of that central estimate, setting up a debate around how much future growth is being brought forward.</p> <p><em>The strategic shift away from underperforming and non core businesses in Europe and the Americas, and redeployment of capital into high return businesses in Asia and the Middle East, is expected to improve overall net interest margins and boost group return on equity through better allocation of resources.   Disproportionate investment in digital transformation, including AI driven efficiency gains and digital onboarding, will generate structural cost reductions (organizational simplification savings), directly improving the cost to income ratio and lifting long term operating leverage and net margins.</em></p> <p>Read the complete narrative.</p> <p>Want to see how steady revenue expansion, rising margins and a richer earnings multiple all fit together into that fair value math? The narrative leans on bold efficiency gains, ambitious profitability targets and a long runway for capital redeployment, but the exact assumptions behind those projections might surprise you.</p> <p><strong>Result: Fair Value of $10.62 (OVERVALUED)</strong></p> <p>Have a read of the narrative in full and understand what's behind the forecasts.</p> <p>However, sustained Hong Kong property weakness, or sharper than expected Asian macro and regulatory headwinds, could easily derail those margin and earnings ambitions.</p> <p>Find out about the key risks to this HSBC Holdings narrative.</p> <h2>Another Angle on Valuation</h2> <p>While the narrative fair value suggests HSBC is about 4.7% overvalued, its current price to earnings ratio of 15.4 times versus a European banks average of 10.5 times and a fair ratio of 10.2 times points to a much richer valuation that could cap upside if sentiment cools.</p> <p>See what the numbers say about this price — find out in our valuation breakdown.</p> <figure><img height="476" src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/f008994a-d570-4ba1-a2cf-79bc52d60528/chart/pe-multiple-vs-industry?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="746" original-src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/f008994a-d570-4ba1-a2cf-79bc52d60528/chart/pe-multiple-vs-industry"/><figcaption>LSE:HSBA PE Ratio as at Dec 2025</figcaption></figure><p>Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out HSBC Holdings for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 915 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.</p> <h2> Build Your Own HSBC Holdings Narrative</h2> <p>If you see the story differently, or would rather dig into the numbers yourself, you can spin up a tailored narrative in minutes: Do it your way.</p> <p>A great starting point for your HSBC Holdings research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.</p> <h2>Looking for more investment ideas?</h2> <p>Do not stop with one bank when the market is full of potential. Use the Simply Wall Street Screener to uncover focused opportunities you might otherwise miss.</p> <ul> <li>Capture potential rebounds in overlooked names by scanning these 3633 penny stocks with strong financials that pair smaller market caps with surprisingly resilient fundamentals.</li> <li>Capitalize on major tech shifts by targeting these 25 AI penny stocks positioned at the intersection of artificial intelligence and scalable business models.</li> <li>Lock in value now by reviewing these 915 undervalued stocks based on cash flows where cash flow strength and discounted prices could set up powerful long term returns.</li> </ul> <p><em> This article by Simply Wall St is general in nature. <strong>We provide commentary based on historical data     and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice.</strong> It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your     financial situation. We aim to bring you long-term focused analysis driven by fundamental data.     Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.     Simply Wall St has no position in any stocks mentioned.</em></p><div><p>Mobile Infrastructure for Defense and Disaster</p><p>The next wave in robotics isn't humanoid. Its fully autonomous towers delivering 5G, ISR, and radar in under 30 minutes, anywhere.</p><p>Get the investor briefing before the next round of contracts</p><p><span>Sponsored On Behalf of CiTech</span></p></div></div></div>

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HSBC

<p>HSBC Holdings' share price has risen 42% year-to-date, driven by strong earnings and profitability. Despite trading above analyst targets, it shows a 4.7% overvaluation against a fair value of £10.62. Strategic shifts and digital investments aim to boost margins, but risks include Hong Kong property weakness and Asian macro headwinds. The current P/E ratio of 15.4 suggests a richer valuation compared to European banks. Simply Wall St provides a detailed analysis and valuation breakdown, highlighting potential investment opportunities.</p>

- HSBC Holdings has achieved a 42% increase in share price year-to-date, driven by strong earnings and rising profitability, despite being considered 4.7% overvalued against a fair value of $10.62.  
- The company's strategic shift to prioritize high-return businesses in Asia and the Middle East, along with substantial investment in digital transformation, is expected to enhance net interest margins and return on equity.  
- However, risks such as ongoing weakness in Hong Kong property and potential regulatory challenges in Asia could disrupt projected earnings and margins moving forward.

Is HSBC (LSE:HSBA) Still Undervalued After Its Strong Recent Share Price Rally?