HSBC: Deutsche Bank downgrades stock

(CercleFinance.com) - Deutsche Bank announced on Monday that it had downgraded its recommendation on HSBC shares from "buy" to "hold", while raising its target price from 830 pence to 910 pence.


In a research note, the analyst explains that he expects the remaining restructuring measures to be taken by the bank to be "relatively limited".

In this respect, these initiatives should simply enable the bank to maintain its return on tangible equity (ROTE) at current levels in the face of falling interest rates, he points out.

If the scale of the restructuring remains contained, as it expects, then expectations regarding capital redistribution - one of the share's key strengths - should also remain unchanged, the broker adds.

In view of the recent rise in the share price, however, Deutsche Bank says it no longer sees potential value creation at current levels, the note adds.


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