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Investing.com -- UK banks are preparing to release their fourth quarter 2025 results, with Lloyds Banking Group PLC (LON:LLOY) kicking off the earnings season on Thursday.

According to a UBS preview report, the bank maintains a positive outlook on the sector despite banks outperforming their predictions last year. Investors are currently focused on potential downside risks to pricing and whether meeting consensus targets will be sufficient to maintain confidence given the sector’s recent revaluation.

The report indicates significant investor overweight positions in Barclays PLC (LON:BARC), Lloyds, and NatWest Group PLC (LON:NWG), driven by hedge tailwinds and price-to-earnings discounts.

Strategic updates from Barclays and NatWest may reassure investors about growth forecasts, though there will be sensitivity to any signs of weakening price discipline among lenders.

International banks HSBC Holdings PLC (LON:HSBA) and Standard Chartered PLC (LON:STAN) have each risen approximately 20% in the past three months, with investor discussions centered on long-term growth in wealth management.

UBS believes wealth management offers promise for faster earnings growth and higher returns on tangible equity (ROTE) in the medium term.

On Thursday, Lloyds reported a 12% increase in annual profit, surpassing analyst expectations despite setting aside nearly £1 billion for compensation related to mis-sold motor finance products. The British lender’s profit before tax rose to £6.7 billion for 2025, up from £5.97 billion in the previous year. This exceeded the average analyst forecast of £6.4 billion.

The bank also raised its profitability targets, now aiming for a return on tangible equity above 16% in 2026. This represents a significant upgrade from its previous goal of 12% for 2025.

NatWest is set to report on February 13, Barclays on February 10, Standard Chartered on February 24, and HSBC on February 25. Shawbrook Group PLC (LON:SHAW) will release its maiden post-IPO full-year results on March 12.

UBS remains overweight on UK banks with a preference for lower P/E stocks including Barclays, NatWest, and Standard Chartered.

The report highlights ongoing debates about the relative merits of NatWest versus Lloyds, with Lloyds trading at 9.8x compared to NatWest at 8.5x. Some investors believe NatWest needs a stronger growth narrative beyond hedge tailwinds to progress further.

UBS expects all banks to face investor pressure to take their capital ratios to around 13%, similar to Lloyds’ guidance for fiscal year 2026. The firm also identifies bolt-on mergers and acquisitions as a key theme for 2026.

Investing.com -- HSBC initiated coverage of Waters Corp. with a Buy rating and a $460 price target, saying that the company’s pending acquisition of Becton Dickinson’s Biosciences and Diagnostic Solutions business could unlock value through synergies and accelerate earnings growth.

The bank said Waters offers a growth-at-a-reasonable-price profile, with mid-teens earnings growth supported by an equipment replacement cycle, revenue and cost synergies from the $17.5bn deal, and operating leverage on an already strong margin base.

HSBC also said a higher share of recurring revenue from consumables and services should provide stability, while lower interest rates and post-deal deleveraging could support a valuation rerating.

The transaction, expected to close around the end of the first quarter of 2026, would create a more diversified life sciences and diagnostics group with a larger installed base. HSBC said the expanded footprint should support best-in-industry growth and margin performance as replacement demand builds.

HSBC acknowledged investor skepticism around the deal, including concerns that the price paid for BD’s assets is high and could pressure returns in the near term. It also flagged ongoing uncertainty in China due to volume-based procurement and anti-corruption efforts, as well as broader geopolitical risks that could weigh on growth and margins.

Despite those risks, HSBC said the market is underestimating the strategic benefits of the transaction. It expects faster entry into higher-growth segments, a stronger pipeline of product launches, and meaningful synergies to drive market share gains over time. HSBC’s forecasts are based on Waters on a standalone basis.

The $460 price target is derived from a 24x pro forma 2028 earnings multiple. HSBC said deal completion by the end of the first quarter of 2026 and Waters’ fiscal 2025 results on Feb. 12 are key near-term catalysts.

Investing.com – U.K. stocks were higher after the close on Tuesday, as gains in the Banking, Electrical and Gas, Water & Multiutilities sectors led shares higher.

At the close in London, the Investing.com United Kingdom 100 gained 0.51%.

The best performers of the session on the Investing.com United Kingdom 100 were HSBC Holdings PLC (LON:HSBA), which rose 2.82% or 35.00 points to trade at 1,277.20 at the close. Meanwhile, Vistry Group PLC (LON:VTYV) added 2.71% or 17.60 points to end at 666.60 and NatWest Group PLC (LON:NWG) was up 2.65% or 17.20 points to 667.60 in late trade.

The worst performers of the session were Fresnillo PLC (LON:FRES), which fell 6.92% or 308.00 points to trade at 4,140.00 at the close. Relx PLC (LON:REL) declined 5.13% or 147.00 points to end at 2,720.00 and Sage Group PLC (LON:SGE) was down 5.12% or 53.40 points to 989.60.

Rising stocks outnumbered declining ones on the London Stock Exchange by 972 to 796 and 534 ended unchanged.

Shares in HSBC Holdings PLC (LON:HSBA) rose to all time highs; gaining 2.82% or 35.00 to 1,277.20. Shares in Relx PLC (LON:REL) fell to 52-week lows; down 5.13% or 147.00 to 2,720.00. Shares in NatWest Group PLC (LON:NWG) rose to 5-year highs; gaining 2.65% or 17.20 to 667.60.

Gold Futures for April delivery was down 0.01% or 0.71 to $5,121.59 a troy ounce. Elsewhere in commodities trading, Crude oil for delivery in March rose 2.26% or 1.37 to hit $62.00 a barrel, while the April Brent oil contract rose 2.05% or 1.33 to trade at $66.10 a barrel.

GBP/USD was up 0.67% to 1.38, while EUR/GBP unchanged 0.10% to 0.87.

The US Dollar Index Futures was down 0.77% at 96.11.

Investing.com -- HSBC is calling for investors to remain firmly positioned for further gains across global risk assets, arguing that market dynamics continue to favour an aggressive pro-risk stance. 

The bank said it is “almost maximum OW in equities, and OW in HY credit, EMD and gold,” while staying underweight in developed-market sovereigns, investment-grade credit and oil.

In its latest strategy note, HSBC stated that geopolitics remains a secondary concern, stressing that “to us it’s about U.S. rates and rates volatility and near-term growth expectations.” 

The bank argued that fourth-quarter S&P 500 earnings expectations are “still way too low,” and ahead of a pivotal earnings week, it recommends rotating “from the rates-sensitive high-beta sectors back to mega caps.”

HSBC also downplayed risks of a renewed spike in interest-rate volatility, saying it does not expect the so-called “Danger Zone of higher U.S. rate expectations” to be triggered yet. 

It believes U.S. labour data will “stay ‘mixed enough’, which in turn should send volatility in FX and rates even lower.” 

This backdrop, the bank said, supports its overweight calls in high-yield credit and emerging-market debt, with a “preference for high-beta EM names.”

They added that technical indicators, including sentiment, positioning, momentum and cyclical gauges, “all support a continued risk-on and cyclical stance across asset classes.”

Within equities, HSBC remains overweight the U.S., particularly mega-cap tech, as well as Japan, eurozone banks and emerging markets. 

It also upgraded U.K. gilts to overweight, saying fiscal concerns should “temporarily make way for cyclical concerns.”

Investing.com -- U.S. stock futures traded in a mixed fashion Tuesday ahead of the start of the latest Federal Reserve meeting as the earnings season kicks into full gear.

Here are some of the biggest premarket U.S. stock movers today:

• American Airlines (BMV:AAL) stock rose 3.5% after the carrier forecast 2026 profit above expectations, buoyed by a recovery in corporate travel and strong demand for high-margin premium services.

• General Motors (NYSE:GM) stock gained 4.5% after the auto giant reported a higher fourth-quarter core profit, helped by stronger sales of its affordable crossover SUVs and pickup trucks through the year. 

• Kimberly-Clark (NASDAQ:KMB) stock rose 1.2% after the consumer products giant reported fourth quarter adjusted earnings that exceeded expectations, as its strategic transformation toward higher-margin personal care categories continues.

• JetBlue (NASDAQ:JBLU) stock fell 3.5% after the low-cost carrier reported wider-than-expected fourth quarter losses, despite slightly exceeding revenue forecasts.

• Northrop Grumman (NYSE:NOC) stock fell 2% after the aerospace and defense supplier posted higher fourth-quarter profit and revenue, helped by strong sales in its aeronautics business amid heightened geopolitical uncertainty.

• Unitedhealth (NYSE:UNH) stock slumped 16% after its fourth-quarter earnings slumped, as the health insurer grapples with a challenging period marked by elevated medical costs. The Trump administration’s proposal of a smaller-than-expected increase to next year’s Medicare Advantage plans also weighed.

• United Parcel Service (NYSE:UPS) stock gained 3.1% after the world’s largest package delivery company forecast higher 2026 revenue, as it continues to reduce low-margin deliveries for its biggest customer, Amazon, and shifts toward higher-paying shipments.

• Rtx Corp (NYSE:RTX) stock gained 3.6% after the aerospace and defense giant posted a higher fourth-quarter revenue and profit, driven by a rise in sales for its engines and a strong appetite for commercial aircraft maintenance and repair services.

• Roper Technologies (NASDAQ:ROP) stock slipped 2.1% after the software company delivered a modest earnings beat in the fourth quarter, but its full-year outlook fell short of market expectations.

• CoreWeave (NASDAQ:CRWV) stock surged 4.5% after tech giant Nvidia invested an additional $2 billion in the cloud computing firm, prompting Deutsche Bank to upgrade its stance to “buy” from “hold”.

• Cloudflare (NYSE:NET) stock soared 11%, extending a 9.6% gain posted Monday as investors continue to respond to growing excitement around Clawdbot, an open-source AI agent.

• HSBC (NYSE:HSBC) ADRs rose 2.9% after the bank’s market value rose above $300  billion, with the U.K.-based banking giant likely to raise profit targets when it reports earnings shortly.

Investing.com -- HSBC shares rose over 2.9% to a new record high on Tuesday, briefly pushing the bank’s market value above $300 billion and placing it on par with AstraZeneca for the top position in London’s FTSE 100 index.

By 11:10 GMT, HSBC shares increased 2.91% to £12.79, bringing the bank’s year-to-date gains to approximately 9%. This performance made HSBC the leading gainer on the FTSE 100 on Tuesday, while the broader index was up around 0.6%.

The FTSE 350 banking index has climbed 6% this year, outperforming its euro zone counterparts, which have risen 4.2% during the same period.

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