HSBC downgraded Shell (NYSE:SHEL) to Hold on August 1, 2025, citing concerns over rising debt and a weaker trading outlook. Analyst Kim Fustier warned that Shell’s net debt could exceed $60 billion by 2027, with operating cash flows falling short of covering dividends and capex.

The bank also trimmed Shell’s earnings and cash flow forecasts for 2025-2027 by 4 to 5 percent, anticipating a decline in its trading division and deeper losses in its chemicals segment. Despite trading at a premium to peers, HSBC sees limited upside potential for Shell.

Shell is a major integrated energy company based in London, with operations spanning oil, gas, chemicals, and renewables. Employing over 90,000 people in 70 countries, Shell is a key player in the global energy sector.

While acknowledging Shell’s potential as an investment, HSBC believes certain AI stocks offer greater upside potential with less downside risk. For those seeking undervalued AI stocks, a free report on the best short-term AI stock is available for consideration.

Read more at Yahoo Finance: HSBC Downgrades Shell (NYSE:SHEL) to Hold, Flags Rising Debt and Weaker Trading Outlook