Bank of America Securities analyst Christopher Kuplent has maintained their neutral stance on BP stock, giving a Hold rating today.
Christopher Kuplent has given his Hold rating due to a combination of factors related to BP p.l.c.’s recent strategic adjustments and financial outlook. While BP has introduced a new financial framework that appears more realistic, the anticipated free cash flow yield by 2025 is expected to be less than 10%, which does not support consensus upgrades. This cautious outlook is reflected in the decision to maintain a Hold rating, as BP’s financial prospects are less appealing compared to peers like Shell and TotalEnergies, which offer higher cash yields.
Moreover, BP’s strategy shift towards more disposals aims to strengthen the balance sheet rather than enhance shareholder buybacks. The company’s pivot away from low-carbon investments towards upstream growth follows a cyclical pattern, potentially diluting shareholder value. This strategic direction, coupled with the potential for activist pressure for more significant changes, contributes to the Hold rating, as the company navigates its current financial and strategic landscape.
In another report released today, J.P. Morgan also maintained a Hold rating on the stock with a £4.80 price target.
Based on the recent corporate insider activity of 25 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of BP in relation to earlier this year.