UBS cuts target for HSBC after weak Q1 revenue performance

UBS has lowered its target price for HSBC from 665p to 630p and kept a 'neutral' rating following the bank's first-quarter results, saying that it is still waiting on revenue momentum to resume.HSBC's pre-tax profit fell 20% year-on-year to $6.8bn, slightly below UBS' forecast for $6.9bn, though the bank said this modest 'miss' "hides a mixed picture".Lower costs and impairments than expected offset a disappointing top line as revenues fell by a worse-than-anticipated 14% year-on-year to $15.9bn due to weakness in Global Banking and Markets and the Principal Retail Banking and Wealth Management businesses. UBS said: "A decline in non-investment banking revenues on the year-ago quarter is essentially the consequence of the deleveraging and refocusing of HSBC that management are undertaking. Businesses have been sold and high margin books put into run-off. This has created a drag on revenue performance which the group is still working through in our view."The Swiss bank has now trimmed its 2014 and 2015 earnings forecasts for HSBC by 2% and 3%, respectively."For HSBC to re-rate we continue to believe it will need to see an end of de-leveraging and a return of revenue growth at a group level," UBS said.The stock was 0.4% lower at 594p by 10:13 on Thursday.BC