Will Shell and BP Shares Move Lower? Analyst Downgrades Stocks

Shares in Shell (LON: SHEL) and BP (LON: BP.) slipped on Monday, with Bank of America having cut its ratings on both oil majors last week, warning that weaker commodity prices and fading refining margins could leave the sector short of the free-cash-flow buffers that investors have come to expect.

Bank of America downgraded Shell to Neutral from Buy and trimmed its price target to 3,100p from 3,200p. 

The bank said lower oil and gas prices and “deflating refining margins” will “leave the sector grappling for more FCF cushions than it is already sitting on.” 

It added that there are “fewer inorganic cushions available that are not already discounted in elevated share prices.”

BP received an even sharper downgrade, cut to Underperform from Neutral, with its price target lowered to 375p from 440p. Bank of America repeated the same concerns across the sector, arguing that the backdrop for 2026 could be more challenging as cash generation becomes less abundant.

BP shares, which have risen 13.5% so far this year after a strong rally since May, are down over 1% on Monday and are sitting at a key support level. 

The stock has slipped 2.5% over the past month and currently trades at 453.7p.

Shell, trading at 2,757p, is down 2.6% over the past month and up 11.6% year-to-date. While the shares dipped just 0.1% on Monday, they also sit around a key technical support area.