Buy Chevron as its Middle East exposure is lower than rival Exxon’s, says HSBC

Investors should buy shares of Chevron as the company’s exposure to the Middle East is relative to rivals, according to HSBC. The bank upgraded the energy giant to buy from hold. Its price target of $215, up from $180, implies upside of around 7% from Thursday’s close. Chevron shares have surged more than 32% this year, slightly outpacing rival those of Exxon Mobil . However, analyst Kim Fustier pointed out that Chevron is much less reliant on Middle Eastern oil than Exxon as the U.S.-Iran war continues. CVX YTD mountain CVX in 2026 Fustier noted that Chevron’s crude oil and natural gas production in the region total less than 200,000 barrels per day. Exxon, meanwhile, counts on the Middle East more than 900,000 barrels per day. “We prefer Chevron to Exxon given its unusually deep discount on 2026 EV/DACF (12%), lower Middle East exposure, and higher balance sheet gearing which offers more leverage to rising commodity prices,” Fustier wrote. She added that Chevron has “above-average crude oil price exposure by virtue of its lower average tax rate and high upstream bias. As a result, earnings and cashflow upgrades for 2026 are among the highest in our coverage universe at 78% and 31% respectively.” The upgrade comes after the bank downgraded Chevron to hold in February due to valuation. However, “at the current elevated price environment, cash flow generation improves substantially across the Permian, Guyana and TCO.” West Texas Intermediate futures have surged more than 44% this month, fueled by the conflict in the Middle East. International Brent has outperformed, soaring 51% in that time. Chevron shares ticked nearly 1% higher in the premarket Friday following the upgrade.