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The HSBC (LSE: HSBA) share price has had a barnstorming year. It’s up 60% in the last 12 months to 1,528p.
All the FTSE 100 banks have done well, but HSBC has streaked ahead. Barclays and Lloyds are up around 35% over one year, while NatWest has gained roughly 27%.
Over five years, HSBC shares are up around 307%, with dividends on top. Barclays is up 167%, Lloyds 149% and NatWest 188%. With dividends reinvested, the total return from HSBC must be closer to 330%.
That’s stunning. If this was a US tech stock, we’d all be rushing to buy it.
Why have FTSE 100 banks done so well
Higher interest rates have been a big factor. Banks have been able to charge more for loans, while keeping a healthy spread between what they earn on lending and pay on deposits. The UK economy has been patchy, but mortgage lending has held up and credit losses haven’t spiralled.
HSBC has also had some advantages its UK-focused rivals can’t match. It’s a global banking giant with particularly strong positions in Hong Kong and Asia, plus huge corporate, investment and wealth-management businesses. In 2025, reported profit was $29.9bn. The board completed $6bn of share buybacks.
Recent numbers (4 August) were even stronger. Its first-half 2026 reported profit jumped 23% to $19.5bn. HSBC is targeting a return on tangible equity of at least 17% through 2028.
Its geographical reach gives it options that Lloyds, NatWest and Barclays simply don’t have. Hong Kong remains a particularly important market, while HSBC also has enormous exposure to international trade and wealth.
There are challenges too
Yet the shares appear to have topped out. Beijing has been tightening controls around mainland Chinese customers using Hong Kong financial services. That could hit lucrative cross-border business.
Also, the HSBC price-to-earnings ratio has climbed to 16.8, while the price-to-book ratio is around 1.8. It’s not hugely expensive, but it’s not a bargain either. The trailing dividend yield has slipped to 3.6%.
So what do the experts expect? The 27 analysts offering one-year share price forecasts produce a consensus target of 1,526p. If correct, that’s roughly a 2% dip from today. It seems they share my concerns about the valuation and outlook.
There’s a huge range though. One optimist sees the shares hitting 1,855p, while one gloomy soul forecasts just 1,117p. That would mean a 27% slump. I bought HSBC in June and that would wipe out my modest early gain.
Expert views are mixed
Of the 21 analysts giving stock ratings in the past three months, most are positive:
- Strong Buy: 6
- Buy: 3
- Hold: 9
- Sell: 1
- Strong Sell 2
But nine recommend holding. That’s hardly a vote of confidence. Personally, I don’t expect HSBC shares to fall anywhere near 1,117p, unless we get a wider stock market crash. But I can imagine them struggling to make headway after such a strong run.
I think HSBC is a brilliant long-term opportunity. But this may not be the ideal time to consider it. Other growth and income stocks on the FTSE 100 excite me more today.
Should you invest £5,000 in HSBC Holdings right now?
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Harvey Jones owns shares in HSBC, Lloyds and NatWest.
This story originally appeared on Motley Fool
