HSBC bank downgraded its rating due to rising debts of Shell and trading risks.

HSBC Bank downgraded Shell's rating from "buy" to "hold" on Monday, with the conclusion that the oil giant's investor dividend payouts by the end of this decade cannot be supported by internal funding, and its valuation premium relative to European peers has become "excessive". HSBC Bank stated that although Shell has a "robust" financial structure, its net debt "may rise in the foreseeable future. This could, like for BP and TotalEnergies, affect market perception of the sustainability of its dividend." HSBC Bank said that the normalization of the oil and gas trading environment is affecting Shell's earnings. Shell faces greater risks compared to its peers, "as it is more dependent on trading income than the industry average". The valuation premium of Shell relative to its main European competitor, TotalEnergies, is "no longer reasonable". On Monday, Shell's share price fell by 0.6% to 2692 pence. HSBC Bank raised its target price from the previous 2900 pence to 2950 pence.