HSBC advises buying BP and TotalEnergies shares — CNBC

HSBC has upgraded its ratings on BP and TotalEnergies shares to “buy.” The bank cited higher natural gas prices in Europe as one of the factors behind the decision. HSBC also maintained “buy” ratings for Shell, Spain’s Repsol and Chevron.

Revision of gas price forecast

As CNBC reports, HSBC raised its forecast for the price of European natural gas for the remainder of the year by 34% and for next year by 40%. The bank also slightly increased its forecast for 2028.

HSBC analyst Kim Fustier expects a significant improvement in forecasts for BP and TotalEnergies in their oil businesses and refining margins. She also pointed to the potential for substantial cash generation and share buybacks. In her assessment, the shares of companies with a “buy” rating have upside potential of around 20%.

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HSBC’s base-case scenario assumes that the situation around the Strait of Hormuz may remain unstable, with recurring disruptions and prolonged uncertainty. At the same time, the bank expects a further recovery in shipping volumes.

JPMorgan’s assessment of BP

JPMorgan has also upgraded its rating on BP to “overweight.” The bank believes that business simplification and the restoration of long-term growth could be positive for investors.

JPMorgan drew attention to BP’s discovery at the Bumerangue offshore block in Brazil. According to Wood Mackenzie, this is BP’s largest discovery in 25 years. CNBC notes that the company is once again focusing on its oil and gas business while maintaining operations in solar energy, battery technologies and a joint wind power project.