HSBC's Rating Changes#
HSBC has recently updated its ratings and target prices for several major oil companies. The bank's adjustments come in response to a supply shock in the Middle East, which has led to significant upward revisions in earnings forecasts for 2026 and 2027.
Key Upgrades and Downgrades#
Senior analyst Kim Fustier announced that Chevron has been upgraded to a 'Buy' rating, while BP's rating has been raised to 'Hold.' In contrast, Galp has been downgraded to 'Hold.' HSBC maintains neutral or cautious positions on other companies, including ENI, Equinor, Repsol, Shell, TotalEnergies, and ExxonMobil.
Target Price Increases#
The target prices for these companies have increased by an average of 22%. Notable adjustments include BP's target raised to 565 pence, Chevron to $215, and Exxon to $158. Other companies like Shell, TotalEnergies, and Occidental have also seen their target prices rise significantly.
Impact of Middle East Disruptions#
The effective closure of the Strait of Hormuz since February 28 has created what HSBC describes as an "unprecedented physical disruption" in oil, refining, and liquefied natural gas (LNG) markets. While many oil companies are experiencing volume losses due to their exposure to this region, HSBC notes that these losses are more than compensated by rising oil and gas prices.
HSBC has raised its earnings estimates for 2026 by an average of 50% and for 2027 by 13%. The largest upgrades are seen for BP and Chevron, as well as refiners like Repsol and gas-focused companies such as Equinor. Despite these positive adjustments, HSBC cautions that valuations appear "broadly fair," with shares nearing all-time highs, although strong commodity trends may push stock prices higher.