HSBC upgrades BP to Buy with 640p target on higher oil forecasts

HSBC upgraded BP to Buy from Hold on Friday, September 25, 2026, lifting its price target to 640 pence from 570 pence. The revised target implies nearly 18% upside.

The change follows higher commodity assumptions by an analyst team led by Kim Fustier. HSBC raised its 2026 Brent crude forecast to approximately $90 per barrel from $80, and its 2027 forecast to $85 from $65, citing a gradual recovery in Strait of Hormuz flows. It also increased its second-half 2026 TTF gas forecast to $22.5 per million British thermal units from $16.7, and its 2027 estimate to $17 from $12.

The bank noted that BP shares trade at a roughly 26% discount on 2027 enterprise value to debt-adjusted cash flow compared with Shell and TotalEnergies. HSBC expects that gap to narrow by half. The analysts stated that BP faces less strategic pressure to sell assets to cut debt, though they do not expect share buybacks to resume before 2028 unless the company changes its definition of gearing.

Across the global oil sector, HSBC raised its 2026-2028 earnings per share estimates by averages of 19%, 65%, and 33%, while cash flow per share projections climbed by 12%, 30%, and 14%.