Update shared on03 Sep 2025
Fair value Increased 1.16%Analysts have raised BP’s price target to £4.43, citing its strong recent results, attractive valuation relative to peers, operational improvements, and the positive impact of the Bumerangue Block discovery.
Analyst Commentary
- Bullish analysts highlight BP's relative strength in recent IOC results, supported by its unique mix of growth options, resource depth, and sustainable shareholder returns.
- Multiple firms point to a narrowing valuation gap with European supermajors, with BP's shares considered attractively valued relative to peers.
- The Bumerangue Block discovery is seen as a potential long-term positive catalyst, transforming BP's upstream growth opportunities.
- Analysts note improved operational execution, stronger-than-expected Q2 earnings, and robust trading performance, particularly with higher refining margins.
- Cost reduction initiatives and ongoing efficiency improvements are recognized as supporting near- and medium-term upside in BP's share price.
What's in the News
- Elliott Investment Management, a major BP shareholder, has called for urgent action from the incoming chairman to address BP's operational underperformance, cost base, and capital allocation (Bloomberg).
- Elliott emphasized the need for "decisive leadership" from the new BP chair to drive a company turnaround (Bloomberg).
- Reports indicate Shell was in early-stage, active talks to acquire BP, which could represent the largest oil sector deal since Exxon Mobil’s $83B merger, with BP shares spiking nearly 10% on the news (Wall Street Journal).
- Shell subsequently denied acquisition talks with BP, calling related media reports "market speculation," while BP shares pared some gains but remained up 2% (Bloomberg).
- Sources suggest it is "unlikely" Shell would acquire BP in its entirety, with a possible scenario where various BP assets are acquired by multiple companies if any deal transpires (CNBC).
Valuation Changes
Summary of Valuation Changes for BP
- The Consensus Analyst Price Target remained effectively unchanged, moving only marginally from £4.39 to £4.43.
- The Future P/E for BP has significantly fallen from 11.43x to 8.65x.
- The Consensus Revenue Growth forecasts for BP has significantly fallen from -2.3% per annum to -2.5% per annum.
Disclaimer
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