With the recent drop in oil prices leaving energy stocks trading at attractive valuations, this is a good time to buy Chevron, HSBC said on Wednesday. Analyst Gordon Gray, who upgraded the energy company’s stock to buy from hold, said in a note to clients that Chevron is trading at one of the most attractive levels in the market. “Chevron stock has been one of the worst performers of the bunch over the past month, reversing some of its earlier better performance,” Gray said. “This has helped bring valuations back to a level that we think justifies the upgrade.” Gray also cites the company’s buyback program as among the reasons he likes the stock, noting that there’s a high chance Chevron raises that guidance again. Meanwhile, the company’s high leverage over crude oil prices can generate strong cash flow. “Chevron is one of the most leveraged stocks in the industry to improve crude oil prices and its dividend is well supported, but we think the flow of positive news on share buybacks has now been largely discounted in valuation,” Gray wrote. Shares of Chevron are up more than 23% this year as the world grapples with a decline in oil supplies and record-high gas prices amid the war in Ukraine. At the same time, the energy sector has gained more than 30%, although it has stepped back from recent highs. With the bank’s $167 price target, Chevron’s stock is likely up 15.5% from Tuesday’s close. – CNBC’s Michael Bloom contributed reporting