HSBC has adjusted its recommendation on Chevron (NYSE: CVX), lowering the rating from Buy to Hold while simultaneously raising the firms price target to $180.00 from $169.00. That revised target is set just above Chevrons most recent price of $176.90, with the share price trading close to its 52-week high of $177.30.
The rating shift comes even though HSBC continues to express a constructive view of Chevrons combination of cash flow growth and financial discipline. In its research note, the bank said those operational attributes remain attractive, but cited the magnitude of the stocks rally as a concern for further upside from current levels.
HSBC analyst Kim Fustier identified the 16% year-to-date increase in Chevrons share price as the central reason for moving to Hold. The analyst noted that optimism tied to developments in Venezuela and firmer oil prices has driven much of the recent appreciation, stretching the companys valuation according to the note.
Independent data referenced by HSBC corroborates the 16% YTD return and indicates technical measures currently point to overbought conditions. The same data set also flags that, despite the recent rally, Chevron may still be undervalued in some respects and that additional analytical tips are available for subscribers who follow deeper metrics.
On relative valuation, HSBC sees Chevron trading at about a 2% discount to Exxon Mobil on 2026 estimated EV/DACF, a gap the firm regards as reasonable and one that limits potential upside versus peers from current levels.
The note also drew attention to distribution yields projected for 2026. HSBC estimates Chevrons distribution yield at 7.2% for that year, which the firm said now trails several European rivals: BP at roughly 8.5% and Shell exceeding 10% on comparable measures.
Separately, Chevron recently reported fourth-quarter 2025 results. The company posted earnings per share of $1.52, beating analyst expectations of $1.45, while revenue of $46.87 billion fell short of the $47.15 billion forecast. Despite the top-line miss, shares rose in pre-market activity following the release.
During the companys earnings-related conference call, Chevrons CEO provided operational updates. Two mooring berths at the Caspian Pipeline Consortium have returned to service, and a third berth has been scheduled for significant maintenance with an expected resumption of operations later this year. The CEO also discussed a power outage at the Tengiz oil field, attributing the event to a mechanical issue rather than sabotage, while noting that investigations remain ongoing. HSBCs note framed these operational developments as part of Chevrons ongoing efforts to maintain and expand its global footprint.
Notable details:
- HSBC lowered its rating on Chevron from Buy to Hold while raising the price target to $180.00 from $169.00.
- Chevrons shares are trading near $176.90, close to a 52-week high of $177.30.
- The bank pointed to a 16% year-to-date price gain as the principal rationale for the downgrade, citing stretched valuation amid optimism over Venezuela and stronger oil prices.