BP (BP) AI Stock Analysis

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BP

(NYSE:BP)

Rating:65Neutral

Price Target:

$37.00

▲(6.51% Upside)

BP's overall stock score reflects a combination of strong technical indicators and positive earnings call highlights, offset by financial performance challenges and high valuation concerns. The company's strategic initiatives and shareholder returns provide optimism, but financial stability remains a key area for improvement.

Positive Factors

Debt Management

Inorganic cash flows should drive debt lower, which could help short-term performance.

Earnings

Earnings were helped by strong operations and trading that outperformed peers.

Shareholder Returns

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

Negative Factors

Debt and Leverage

BP has the highest leverage in the sector, and current macro conditions put its plan to reduce net debt at risk, potentially leading to suspended buybacks.

Oil Price Outlook

BP's strategy is facing increasing execution risk due to a lower oil price outlook, which may force the company to choose between reducing leverage or suspending buybacks and upstream growth ambitions.

Valuation

BP's valuation isn't cheap, with next twelve months earnings estimates falling more than the sector, leading to a higher relative PE re-rating compared to its peers.

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

Market Cap

$87.88B

Dividend Yield5.54%

Average Volume (3M)7.57M

Price to Earnings (P/E)147.2

Beta (1Y)0.34

Revenue Growth-7.40%

EPS Growth-90.89%

CountryUS

Employees100,500

SectorEnergy

Sector Strength56

IndustryOil & Gas Integrated

Share Statistics

EPS (TTM)0.90

Shares Outstanding2,633,096,400

10 Day Avg. Volume6,585,868

30 Day Avg. Volume7,567,218

Financial Highlights & Ratios

PEG Ratio-2.18

Price to Book (P/B)1.36

Price to Sales (P/S)0.43

P/FCF Ratio6.73

Enterprise Value/Market Cap1.59

Enterprise Value/Revenue0.74

Enterprise Value/Gross Profit4.60

Enterprise Value/Ebitda4.82

Forecast

1Y Price Target

$41.71

Price Target Upside20.06% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering9

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 through multiple key streams. The upstream sector, which involves exploration and production, contributes significantly to its earnings by selling crude oil and natural gas. The downstream sector includes refining operations and the sale of refined products such as gasoline and diesel, which also provide substantial revenue. Additionally, BP engages in trading activities, capitalizing on fluctuations in energy prices. The company has established partnerships and joint ventures with other oil and gas firms, enhancing its operational capabilities and market reach. Furthermore, BP's investments in renewable energy and low-carbon technologies are expected to create new revenue opportunities as global energy markets evolve.

BP Key Performance Indicators (KPIs)

Any

Underlying RC EBIT by Segment

Underlying RC EBIT by Segment
Evaluates earnings before interest and taxes from each business segment, highlighting which areas drive profitability and how operational efficiency impacts overall financial health.

Chart InsightsBP's Gas & Low Carbon Energy and Oil Production & Operations segments show a downward trend in EBIT, reflecting challenges in the energy transition and market conditions. However, the earnings call highlights strong upstream performance with new projects and exploration successes, indicating potential future growth. The Customers & Products segment saw a significant year-over-year earnings increase, despite impairments. BP's strategic divestments and cost reductions are bolstering financial stability, while shareholder returns are enhanced through dividend increases and share buybacks, signaling confidence in long-term value creation.

Data provided by:

Main Street Data

BP Earnings Call Summary

Earnings Call Date:Aug 05, 2025

(Q2-2025)

% Change Since: 8.46%|

Next Earnings Date:Nov 04, 2025

Earnings Call Sentiment Positive

BP had a strong quarter marked by significant exploration successes and operational reliability. Financial achievements, including increased earnings and dividends, were noteworthy. However, challenges remain in the TravelCenters of America segment and with impairments across various projects. Overall, the positive aspects of BP's performance outweigh the lowlights, leading to a favorable outlook.

Q2-2025 Updates

Positive Updates

Strong Operational and Strategic Performance

BP delivered a robust second quarter with operational reliability greater than 96% in both upstream and downstream segments. The company brought five new oil and gas projects on stream year-to-date and made 10 exploration discoveries, marking the best year for discoveries in recent memory.

Significant Exploration Success

BP announced a major discovery in the Bumerangue Block in Brazil, which is the largest discovery in 25 years. The company is optimistic about handling elevated CO2 levels and expects to move at pace with the appraisal program.

Financial Achievements

Underlying earnings in the customer business rose by approximately 50% compared to the previous year. BP announced a 4% increase in the dividend per ordinary share and a $750 million share buyback for the second quarter.

Cost Reduction Progress

BP has achieved approximately $1.7 billion in structural cost reductions since early 2024 and expects to continue this trend with further cost reviews and the implementation of AI and digital technologies.

Record Performance in Convenience and Mobility

The Convenience and Mobility segment reported its best quarter on record since 2012, with strong performance across various regions and segments, including aviation and Castrol.

Negative Updates

Challenges in TravelCenters of America

BP is experiencing tight diesel margins in the TravelCenters of America segment, which is a focus area for improvement to drive better customer footfall and margins.

Impairments Across Businesses

BP recorded impairments totaling $1.2 billion, including decisions to exit certain hydrogen and biofuel projects in Australia and the U.S., as well as in the gas and low carbon segment.

Working Capital Challenges

BP faced a working capital build of $4.7 billion in the first half of the year, with expectations of partial reversal in the second half.

Company Guidance

During BP's Second Quarter 2025 Results Call, the company reported strong operational and strategic performance, emphasizing key metrics such as a 96% reliability rate across upstream and downstream operations. Year-to-date, BP has brought five new oil and gas major projects online, sanctioned four additional ones, and made ten exploration discoveries, marking the best year for discoveries in recent memory. A significant discovery was made in the Bumerangue Block in Brazil. Underlying earnings in the customer business increased by approximately 50% compared to the previous year. Trading delivered strong results quarter-on-quarter despite challenging conditions. Proceeds from completed or announced divestments reached around $3 billion, and structural cost reductions totaled $1.7 billion since early 2024. The company announced a 4% increase in dividends per ordinary share to $0.0832 and a $750 million share buyback for the second quarter. BP is two quarters into a 12-quarter plan, with continued focus on digital technology, portfolio optimization, and cost management to drive long-term shareholder value.

BP Financial Statement Overview

Summary

BP's financial performance is mixed, with strong operational efficiency and cash flow resilience countered by recent revenue declines and net losses. The balance sheet is stable with manageable leverage, but the negative net income and declining profits are concerns.

Income Statement

Positive

BP's income statement shows a mixed performance with a negative net income in TTM (Trailing-Twelve-Months) due to a loss of $1.195 billion. The gross profit margin stands at approximately 15.42% for TTM, which is moderate for the industry. EBIT and EBITDA margins are solid at 8.40% and 14.11%, respectively, indicating operational efficiency despite revenue fluctuations. However, revenue has declined from the previous year, impacting overall profitability.

Balance Sheet

Positive

The balance sheet reflects a stable equity position with a debt-to-equity ratio of approximately 1.22, indicating reasonable leverage. The equity ratio is about 20.69%, showcasing a balanced capital structure. Return on equity is negative due to the net loss, which is a concern. Overall, BP maintains a robust asset base and financial stability despite recent challenges.

Cash Flow

Positive

BP's cash flow statement indicates strong cash generation capabilities with an operating cash flow to net income ratio of approximately -21.02, due to negative net income. Free cash flow is positive at $10.192 billion in TTM, although it has decreased from the previous year. Despite fluctuations, BP demonstrates solid cash management, which is crucial for sustaining operations and investments.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	187.09B	189.19B	208.35B	241.39B	157.74B	105.94B
Gross Profit	30.26B	30.24B	64.06B	55.10B	22.86B	10.18B
EBITDA	28.87B	27.98B	43.50B	59.47B	32.55B	14.54B
Net Income	582.28M	381.00M	15.24B	-1.36B	7.57B	-20.73B
Balance Sheet
Total Assets	284.74B	282.23B	280.29B	288.12B	287.27B	267.65B
Cash, Cash Equivalents and Short-Term Investments	35.31B	34.52B	28.59B	29.77B	30.96B	29.53B
Total Debt	74.98B	71.55B	63.08B	55.49B	69.79B	81.93B
Total Liabilities	204.96B	203.91B	194.80B	205.13B	196.83B	182.09B
Stockholders Equity	59.24B	59.25B	70.28B	67.55B	75.46B	71.25B
Cash Flow
Free Cash Flow	8.61B	12.00B	17.75B	28.86B	12.72B	-144.00M
Operating Cash Flow	23.37B	27.30B	32.04B	40.93B	23.61B	12.16B
Investing Cash Flow	-11.26B	-13.25B	-14.87B	-13.71B	-5.69B	-7.86B
Financing Cash Flow	-11.97B	-7.30B	-13.36B	-28.02B	-18.08B	3.96B

BP Technical Analysis

Technical Analysis Sentiment

Positive

Last Price34.74

Price Trends

50DMA

31.84

Positive

100DMA

30.07

Positive

200DMA

30.05

Positive

Market Momentum

MACD

0.76

Negative

RSI

70.52

Negative

STOCH

51.51

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BP, the sentiment is Positive. The current price of 34.74 is above the 20-day moving average (MA) of 33.26, above the 50-day MA of 31.84, and above the 200-day MA of 30.05, indicating a bullish trend. The MACD of 0.76 indicates Negative momentum. The RSI at 70.52 is Negative, neither overbought nor oversold. The STOCH value of 51.51 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for BP.

BP Peers Comparison

Overall Rating

UnderperformOutperform

Sector (65)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TTE	78 Outperform	$142.60B	11.25	10.96%	5.52%	-10.73%	-36.76%
CVX	76 Outperform	$323.86B	20.42	8.97%	4.27%	-5.02%	-23.13%
XOM	76 Outperform	$474.41B	15.78	11.68%	3.54%	-3.79%	-15.46%
SHEL	74 Outperform	$211.83B	14.35	7.40%	3.87%	―	―
PBR	66 Neutral	$75.17B	5.81	19.48%	13.52%	-13.68%	-13.96%
Sector *	65 Neutral	$15.29B	7.24	2.92%	5.33%	4.27%	-62.52%
BP	65 Neutral	$87.88B	147.20	0.95%	5.54%	-7.40%	-90.89%

* Energy Sector Average

Performance Comparison

34.74

2.35

7.26%

CVX

Chevron

158.20

16.14

11.36%

XOM

Exxon Mobil

111.28

-3.38

-2.95%

PBR

Petroleo Brasileiro SA- Petrobras

12.33

-1.62

-11.61%

SHEL

Shell

73.82

3.74

5.34%

TTE

TotalEnergies

64.03

-3.29

-4.89%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Aug 19, 2025