Here’s Why Morgan Stanley Raised the PT on HSBC Holdings (HSBC)

HSBC Holdings plc (NYSE:HSBC) is one of the Most Undervalued Foreign Stocks to Buy Now. On May 14, Morgan Stanley raised its price target on HSBC Holdings plc (NYSE:HSBC) from 1,419 GBp to 1,463 GBp and maintained an Equal Weight rating on the stock.

The raised price target comes despite recent challenges for the bank. The company released its fiscal Q1 2026 earnings report on May 5. During the quarter, the bank posted pretax profit of $9.4 billion, below the estimates of $9.5 billion and the $9.59 billion ​average of broker estimates compiled by the bank. The bank also revised its 2026 credit loss forecast upward to 45 basis points of average ​gross loans from 40 basis points, citing an uncertain outlook.

According to a Reuters report published on the earnings day, HSBC’s results performed poorly against European rivals as Deutsche Bank posted record quarterly profits, and UBS beat forecasts on strong trading. Analysts at Citi noted that the bank’s wealth business growth of 18% during the quarter also lagged behind Standard Chartered’s 32% growth.

The same report also noted that HSBC reported an unexpected $400 million loss related to the collapse of British mortgage lender Market Financial Solutions (MFS). The loss stemmed from HSBC’s lending to Apollo-backed firm Atlas SP, which had significant exposure to MFS before it collapsed amid fraud allegations. Reuters highlighted that the incident has intensified regulatory scrutiny of banks’ involvement in the $3.5 trillion private credit industry. As a result, regulators in the US, UK, and Canada have all launched reviews, while the US Federal Reserve and Treasury Department have also flagged concerns.

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