Zacks Investment Research upgraded shares of HSBC Holdings plc – ADR (HSBC) from UNDERPERFORM to NEUTRAL on June 24, 2014, with a target price of $54.00.
We are upgrading our recommendation on HSBC to Neutral on the back of its success in lowering operating expenses. However, the company's first-quarter results were disappointing. This was due to a decrease in top line, reflecting weaker revenue growth in Retail Banking and Wealth Management segments and dismal results in Global Banking and Markets. Nevertheless, fall in operating expenses and lower loan-impairment charges were the positives. We believe its restructuring efforts, diversified revenue sources and a strong capital position will continue to aid bottom-line growth. However, sluggish revenue growth in the mature markets, a still weak European economy, lower loan demand, higher litigation costs and stringent regulations remain major near-term concerns.
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