Morgan Stanley: Expects HSBC HOLDINGS (00005) share price to rise relative to the broader market over the next 15 days

Morgan Stanley issued a research report stating that HSBC HOLDINGS (00005) has recently seen its share price pull back, making short-term valuation more attractive. The bank believes the recent adjustment has been excessive and expects the share price to rise relative to the broader market index over the next 15 days; target price HK$173, rating "Overweight." The bank noted that HSBC HOLDINGS' third-quarter results showed wealth management fund flows remained solid, and the group is expected to have greater capital headroom in 2027. Rising deposit competition will pressure net interest margins, but HSBC HOLDINGS is in a better position than many peers. The current price equates to a 2027 forecast dividend yield of 5.4% and a price-to-earnings ratio of 9.4x, which the bank considers attractive relative to Hong Kong and ASEAN financial stocks. The bank estimates the probability of the above scenario occurring at approximately 70% to 80% (i.e., "very likely").