HSBC has moved to increase a number of ratings and target prices across the integrated oil sector after concluding that the shock to Middle East supply has led to substantial upward revisions to company earnings for 2026 and 2027.
Senior analyst Kim Fustier said the bank now upgrades Chevron to Buy, raises BP to Hold, and downgrades Galp to Hold. HSBC retains neutral or cautious positions on ENI, Equinor, Repsol, Shell, TotalEnergies and ExxonMobil.
Across the group, HSBC's target prices climb on average by 22%. The bank's revised targets include BP at 565p, Chevron at $215, Exxon at $158, Shell at 3,350p, TotalEnergies at EUR77, Galp at EUR21, Occidental at $68 and ENI at EUR21.
HSBC flagged that the effective closure of the Strait of Hormuz since Feb. 28 constitutes "an unprecedented physical disruption" for oil, refining and LNG markets. In response, the bank materially raised its 2026 macro assumptions: Brent is lifted to $80 a barrel from $65, European TTF gas to $14/mBtu from $10/mBtu, and refining margins are increased by 50% in HSBC's base scenario.
While several majors will suffer volume losses because of exposure to the region, HSBC noted those losses are more than offset by higher oil and gas prices under the revised assumptions. Companies with relatively limited exposure to the Middle East - namely Equinor, Repsol and ENI - have been among the strongest performers in recent market moves, according to the bank.
On HSBC's revised forecasts, 2026 earnings estimates across the covered group are up on average by 50%, while 2027 estimates rise by 13%. The largest upward revisions are concentrated in oil-levered names such as BP and Chevron, refiners including Repsol, and gas-exposed Equinor.
Despite the earnings upgrades and higher target prices, HSBC cautioned that valuations "look broadly fair," noting that shares are trading near all-time highs. The bank added that strong commodity momentum may well carry stocks higher, even as it flagged elevated valuations.
The analysis raises the question of whether Chevron (CVX) is an appropriate buy at current levels. A separate stock-selection tool notes CVX is evaluated alongside thousands of companies using over 100 financial metrics, aiming to identify risk-reward opportunities without bias. That tool highlights past notable winners with substantial gains.