Goldman Sachs: HSBC Holdings (00005) faces risks of lowering net interest income guidance, lowers target price to 98 Hong Kong dollars.

Goldman Sachs released a research report stating that it has lowered its forecast for HSBC HOLDINGS (00005) net interest income for the fiscal years 2025 to 2027 by approximately $800 million, $2.7 billion, and $3.3 billion US dollars respectively. The bank mentioned that currently HSBC management has provided guidance of approximately $42 billion for net interest income for the 2025 fiscal year, but Goldman Sachs believes that there is a risk of lowering the guidance based on the forecasts of $41.4 billion and $40.7 billion for the 2025 and 2026 fiscal years. Goldman Sachs has also lowered its earnings per share forecast for HSBC for the fiscal years 2025 to 2029 by 4%, 7%, 6%, 3%, and 1% respectively, and has lowered the H-share target price by 5% to HK$98, giving it a "buy" rating. Taking into account the slower macroeconomic growth forecasts, Goldman Sachs has raised its credit cost forecasts for HSBC for the fiscal years 2025 to 2026 from 41 and 35 basis points to 46 and 39 basis points respectively, compared to the guidance range of 30 to 40 basis points for the 2025 fiscal year. Goldman Sachs also expects HSBC to achieve a tangible return on tangible equity (ROTE) of 14.4% for the fiscal years 2025 and 2026, relative to the market forecasts of 15.4% and 15.6% respectively.