BP (BP) AI Stock Analysis

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BP

(NYSE:BP)

61Neutral

BP's overall stock score reflects a challenging financial landscape with declining profitability and high leverage. Despite strong cash flow and strategic progress in production and shareholder returns, the high P/E ratio and technical indicators suggest caution. The company needs to address refining challenges and maintain strategic momentum to improve its market position.

Positive Factors

Financial Performance

BP's fundamental reset, updated financial goals with lower costs, reduced debt, and consistent shareholder returns could result in a valuation uplift.

Shareholder Value

BP expects to consistently return 30-40% of adjusted cash flow from operations to shareholders, comparable to peers.

Negative Factors

Operational Challenges

BP's trading statement indicates lower production and seasonally lower customers and products, aligning with earlier guidance on weak performance.

Performance Issues

BP's shares have meaningfully underperformed peers and the SPX.

Valuation

BP's valuation multiples lag behind US and European IOC peers.

BP (BP) vs. S&P 500 (SPY)

Market Cap

$68.14B

Dividend Yield7.08%

Average Volume (3M)12.64M

Price to Earnings (P/E)195.4

Beta (1Y)0.56

Revenue Growth-9.97%

EPS Growth-98.08%

CountryUS

Employees100,500

SectorEnergy

Sector Strength52

IndustryOil & Gas Integrated

Share Statistics

EPS (TTM)0.10

Shares Outstanding2,676,740,200

10 Day Avg. Volume12,719,933

30 Day Avg. Volume12,642,512

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.45

Price to Cash Flow (P/CF)5.80

P/FCF Ratio10.50

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$34.77

Price Target Upside32.56% Upside

Rating ConsensusHold

Number of Analyst Covering12

BP Business Overview & Revenue Model

Company DescriptionBP p.l.c. provides carbon products and services. The company operates through Gas & Low Carbon Energy, Oil Production & Operations, and Customers & Products segments. It engages in the production of natural gas, and integrated gas and power; trading of gas; operation of onshore and offshore wind power, as well as hydrogen and carbon capture and storage facilities; trading and marketing of renewable and non-renewable power; and production of crude oil. In addition, the company involved in convenience and retail fuel, EV charging, Castrol lubricant, aviation, B2B, and midstream businesses; refining and oil trading; and bioenergy business. The company was founded in 1908 and is headquartered in London, the United Kingdom.

How the Company Makes MoneyBP generates revenue primarily through its upstream and downstream operations. The upstream segment involves the exploration, development, and production of oil and natural gas, which are sold to various markets. The downstream segment includes refining crude oil, manufacturing petrochemicals, and marketing oil products. BP operates a network of retail service stations worldwide and engages in trading activities in the energy markets. The company also invests in renewable energy projects and technologies, although these currently contribute a smaller portion of its overall revenue. Key factors influencing BP's earnings include global oil prices, production volumes, and refining margins, alongside strategic partnerships and joint ventures that expand its market reach and enhance operational efficiency.

BP Financial Statement Overview

Summary

BP faces challenges with declining revenue and profitability, evidenced by reduced margins and a significant drop in net income. However, it maintains moderate financial stability with a manageable debt-to-equity ratio and strong cash flow generation, supporting its operations.

Income Statement

Positive

BP's income statement reveals a mixed performance with declining total revenue from 2023 to 2024 and a significant drop in net income. The gross profit margin decreased from 22.21% in 2023 to 15.98% in 2024, indicating reduced efficiency in core operations. The net profit margin also fell drastically from 7.31% in 2023 to a meager 0.20% in 2024. However, the company maintained a stable EBIT margin of 6.79% in 2024, down from 22.54% in the previous year. Despite the overall decrease in profitability, BP's EBITDA margin improved slightly from 20.87% in 2023 to 15.25% in 2024 due to cost control measures.

Balance Sheet

Positive

BP's balance sheet shows moderate financial stability with a debt-to-equity ratio of 1.21 in 2024, reflecting leverage that could pose risks in a volatile industry. The return on equity (ROE) significantly dropped to 0.64% in 2024 from 21.67% in 2023, indicating weakened profitability relative to shareholders' equity. The equity ratio slightly improved to 20.98% in 2024, suggesting a small increase in equity financing, although it remains relatively low, highlighting potential financial risk.

Cash Flow

Positive

BP's cash flow statement indicates solid cash generation capabilities with a free cash flow of $12 billion in 2024, despite a decrease from $17.75 billion in 2023. The operating cash flow to net income ratio was high at 71.64, showcasing strong cash earnings relative to reported profits. The free cash flow to net income ratio improved to 31.50 in 2024, underlining effective cash management amidst declining profitability.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
189.19B	208.35B	241.39B	157.74B	105.94B
	Gross Profit
30.24B	64.06B	55.10B	22.86B	10.18B
	EBIT
14.84B	46.98B	44.76B	15.09B	-346.00M
	EBITDA
28.85B	43.50B	59.47B	32.55B	14.54B
	Net Income Common Stockholders
381.00M	15.24B	-1.36B	7.57B	-20.73B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
39.37B	28.59B	29.77B	30.96B	29.53B
	Total Assets
282.23B	280.29B	288.12B	287.27B	267.65B
	Total Debt
71.55B	63.08B	55.49B	69.79B	81.93B
	Net Debt
32.34B	35.33B	26.30B	39.11B	52.73B
	Total Liabilities
203.91B	194.80B	205.13B	196.83B	182.09B
	Stockholders Equity
59.25B	70.28B	67.55B	75.46B	71.25B
Cash Flow		Free Cash Flow
12.00B	17.75B	28.86B	12.72B	-144.00M
	Operating Cash Flow
27.30B	32.04B	40.93B	23.61B	12.16B
	Investing Cash Flow
-13.25B	-14.87B	-13.71B	-5.69B	-7.86B
	Financing Cash Flow
-7.30B	-13.36B	-28.02B	-18.08B	3.96B

BP Technical Analysis

Technical Analysis Sentiment

Negative

Last Price26.23

Price Trends

50DMA

32.49

Negative

100DMA

31.01

Negative

200DMA

31.44

Negative

Market Momentum

MACD

0.42

Positive

RSI

54.73

Neutral

STOCH

18.12

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BP, the sentiment is Negative. The current price of 26.23 is below the 20-day moving average (MA) of 32.25, below the 50-day MA of 32.49, and below the 200-day MA of 31.44, indicating a bearish trend. The MACD of 0.42 indicates Positive momentum. The RSI at 54.73 is Neutral, neither overbought nor oversold. The STOCH value of 18.12 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BP.

BP Peers Comparison

Overall Rating

UnderperformOutperform

Sector (57)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SHEL	79 Outperform	$175.55B	12.50	8.82%	4.35%	-5.74%	-11.09%
TTE	78 Outperform	$114.45B	8.28	13.43%	4.88%	-10.66%	-23.19%
XOM	76 Outperform	$457.62B	13.50	14.38%	3.67%	1.86%	-11.52%
CVX	70 Outperform	$255.51B	15.02	11.28%	4.52%	-1.90%	-14.56%
PBR	66 Neutral	$75.00B	11.60	10.52%	21.63%	-10.81%	-70.65%
BP	61 Neutral	$68.14B	195.38	0.59%	7.08%	-9.97%	-98.08%
Sector *	57 Neutral	$7.72B	4.32	-3.75%	6.33%	-0.11%	-64.75%

* Energy Sector Average

Performance Comparison

26.23

-11.09

-29.72%

CVX

Chevron

134.98

-17.39

-11.41%

XOM

Exxon Mobil

103.14

-13.30

-11.42%

PBR

Petroleo Brasileiro SA- Petrobras

11.30

-1.79

-13.67%

SHEL

Shell

62.09

-7.50

-10.78%

TTE

TotalEnergies

54.72

-14.62

-21.08%

BP Earnings Call Summary

Earnings Call Date: Feb 11, 2025 | % Change Since: -22.74% | Next Earnings Date: Apr 29, 2025

Earnings Call Sentiment Neutral

Despite challenges in the refining sector and biofuels margins, BP demonstrated strong strategic progress with an increase in upstream production, a robust dividend growth, and significant cost reductions. The company's strategic reshaping and commitment to shareholder returns offset the negative impacts, suggesting a mixed but slightly positive outlook.

Highlights

Dividend Growth and Share Buybacks

BP increased its dividend per share by 10% and announced $7 billion of share buybacks, including $1.75 billion announced during the call.

Upstream Production Increase

Upstream production was around 2.36 million barrels per day, up 2% for the year with plant reliability above 95%.

Strategic Portfolio Reshaping

Significant strategic progress included 10 new FIDs, new access to Iraq and India, divesting tail assets in Trinidad, and exiting the Empire Wind in the U.S. offshore.

Successful Cost Reduction

BP achieved $750 million in structural cost reductions, reflecting a focused portfolio and efficiency improvements.

Lowlights

Refining Segment Challenges

BP faced a difficult year in refining with a widening outage in 1Q, a challenging margin environment, and was impacted by weaker biofuels margins and a trucking recession impact on TA.

Biofuels Margin Pressure

Biofuels margins, particularly in Europe, were suppressed due to oversupply from Asia and Nordic countries rolling back voluntary mandates to EU levels.

Impact of U.S. Tariffs on Canadian Crude

Uncertainty around U.S. tariffs on Canadian crude affected Whiting's refining margins, with potential impacts on market dynamics being difficult to predict.

Company Guidance

During BP's Fourth Quarter and Full Year Results Call for 2024, several performance metrics and strategic updates were discussed. BP's upstream production increased by 2% to approximately 2.36 million barrels per day, achieving plant reliability above 95%. Despite facing challenges in refining due to outages and a difficult margin environment, BP maintained a robust trading performance, delivering an average 4% uplift to group ROACE over the past five years. The company announced a 10% increase in dividend per share and $7 billion in share buybacks, including $1.75 billion announced during the call. BP highlighted 10 new FIDs, strategic portfolio reshaping, and various acquisitions and divestments, including full ownership of BP bioenergy and Lightsource BP. The call also addressed cost reductions, with $750 million of structural reductions achieved, and plans for a comprehensive strategy update at the upcoming Capital Markets event.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.