Morgan Stanley, in its latest research report, said HSBC HOLDINGS (00005.HK) is seeing risk of lower market expectation for dividend yield; meanwhile, as compared to its European peers, HSBC has an obviously higher valuation with limited short-term catalysts. The research house lowered the rating from Overweight to Underweight, with target price cut from $90 to $75.
Morgan Stanley expects HSBC 2016 revenue may equal US$69.5 billion, 4% lower than market consensus along with business exits, weak GB&M and slowing Asian growth. HSBC has a target payout dividend ratio of 40%-60%. The research house expects the 2015 EPS will equal US$0.78, while the dividend per share will be US$0.47 (dividend ratio:60%).
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