JP Morgan: HSBC HOLDINGS (00005) post-earnings stock price falls excessively, reiterates "overweight" rating.

JPMorgan Chase released a research report stating that it reiterated a "hold" rating on HSBC HOLDINGS (00005), with a target price of HK$180. They believe that HSBC will continue to benefit from the high interest rate environment and strong net new fund inflows, and view the current stock price weakness as a buying opportunity. The report pointed out that HSBC's performance in the first quarter was mixed, with the stock falling 3.8% on May 5th (yesterday) while the Hang Seng Index rose 0.6% during the same period. The bank believes that the stock price has fallen too much, partly due to the market having overly high expectations after Standard Chartered's performance, and concerns about the risk exposure in the private credit market following the expected $400 million provision for fraud-related credit losses. The bank pointed out that overall, the key points from HSBC's performance conference call were positive, and they believe that the risk of significant increase in credit costs due to the Middle East situation and the fraud event is low. HSBC management indicated that there is room for upside in the net interest income guidance of $46 billion, compared to the market's expectation of $45.8 billion, and reiterated the cost and tangible equity return guidance, despite facing risks in the Middle East and private credit.