BP
BP
Strong Buy 2026-04-19
Model
DCF
Price at Report
$44.59
Base IV
$539.66
Bear IV
$255.51
Bull IV
$887.50
Entry Zone: 27-38 · Sell Above: 540
Bore Family Office
Valuation Report — BP p.l.c. (BP) • April 19, 2026
Unlevered DCF (FCFF @ WACC) • Discount Rate: 7.54% • Current Price: $44.59
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
BP p.l.c. (NYSE: BP) is a British multinational integrated energy company founded in 1909 as the Anglo-Persian Oil Company. With operations across oil and gas exploration, production, refining, trading, and renewable energy, BP serves customers in over 60 countries. The company is currently undergoing its most significant strategic restructuring since Deepwater Horizon — pivoting back to oil and gas core businesses after an aggressive and largely unsuccessful low-carbon pivot that destroyed shareholder value between 2020-2024.
CEO Murray Auchincloss has targeted $2B in cost savings by 2027, $20B in asset disposals through 2027, and a reset of the energy transition strategy. The stock trades near its 52-week range lows on operational and strategic uncertainty, but the underlying upstream assets remain high-quality, with deep Gulf of Mexico, US onshore Permian, and Middle East conventional production.
| Business Segment | Revenue | % of Total | YoY Growth | Margin | Notes |
|---|---|---|---|---|---|
| Production & Operations | $46,000M | 24% | +4.0% | — | Upstream conventional + deepwater; ~3.3mm boe/d production |
| Gas & Low Carbon Energy | $38,000M | 20% | +3.0% | — | Natural gas, LNG, CCUS, bioenergy |
| Customers & Products | $98,000M | 52% | +1.0% | — | Refining, marketing, convenience, lubricants |
| Other / Spotlight | $7,000M | 4% | -5.0% | — | Solar, wind, EV charging — being restructured |
| Blended Growth Rate | — | 100% | +1.9% | — | Weighted avg across segments |
📊 Business Lifecycle Stage
Stage 1
Startup
Startup
Stage 2
Hyper Growth
Hyper Growth
Stage 3
Self Funding
Self Funding
Stage 4
Operating Leverage
Operating Leverage
Stage 5
Capital Return
Capital Return
Stage 6
Decline
Decline
Stage 3 — Mature / Restructuring: Revenue growing rapidly, approaching breakeven. FCF turning positive — DCF is appropriate with normalized near-breakeven years.
Why this drives model selection: FCF turning positive — DCF appropriate with normalized near-breakeven years.
📊 Financial Snapshot
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue ($M) | $157,739 | $241,392 | $210,130 | $189,185 | $189,335 |
| Rev YoY Growth | — | +53.0% | -13.0% | -10.0% | +0.1% |
| Gross Margin | 23.9% | 28.8% | 30.5% | 24.8% | 27.1% |
| EBITDA ($M) | $26,598 | $25,243 | $41,120 | $23,242 | $27,593 |
| EBITDA Margin | 16.9% | 10.5% | 19.6% | 12.3% | 14.6% |
| Operating Income ($M) | $11,626 | $10,540 | $24,446 | $5,853 | $9,428 |
| Operating Margin | 7.4% | 4.4% | 11.6% | 3.1% | 5.0% |
| Net Income ($M) | $7,565 | $-2,487 | $15,239 | $2,811 | $1,295 |
| Net Margin | 4.8% | -1.0% | 7.3% | 1.5% | 0.7% |
| EPS (diluted) | $2.24 | $-0.79 | $5.15 | $0.14 | $0.02 |
| Free Cash Flow ($M) | $12,725 | $28,863 | $17,754 | $12,000 | $11,272 |
| Annual DPS | $0.216 | $0.241 | $0.284 | $0.313 | $0.330 |
| Total Debt ($M) | — | — | — | — | — |
⚙️ WACC Build (DCF)
| Input | Value | Notes |
|---|---|---|
| Risk-Free Rate (Rf) | 4.25% | 10-yr US Treasury yield |
| Beta (β) | 0.624 | Market beta (Finnhub) |
| Equity Risk Premium (ERP) | 5.5% | Damodaran US ERP |
| Cost of Equity (Ke) | 7.68% | Ke = Rf + β × ERP |
| Pre-Tax Cost of Debt | 4.80% | Interest exp / gross debt |
| After-Tax Cost of Debt (Kd) | 3.21% | × (1 − 33%) |
| Weight Equity (We) | 21.2% | Mkt cap $0.0B |
| Weight Debt (Wd) | 78.8% | Gross debt $0.0B |
| WACC | 7.54% | DCF discount rate |
📈 DCF Scenarios
$256
🔴 Bear
$540
📊 Base
$888
🚀 Bull
$44.59
Current Price
$43
Analyst Avg PT
| Scenario | Stage 1 (Yrs 1–5) | Stage 2 (Yrs 6–10) | Terminal g | WACC | Intrinsic Value | vs Price |
|---|---|---|---|---|---|---|
| 🔴 Bear | -5.0% | 1.0% | 1.5% | 7.54% | $256 | ▲473.0% |
| 📊 Base | 3.0% | 2.5% | 2.0% | 7.54% | $540 | ▲1110.3% |
| 🚀 Bull | 8.0% | 5.0% | 2.5% | 7.54% | $888 | ▲1890.4% |
📋 Full 10-Year Projection Tables
Bear Scenario
Stage 1: -5.0% | Stage 2: 1.0% | Terminal: 1.5%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 ✦ | Stage 1 | $8.50B | $7.90B | $7.90B |
| Year 2 ✦ | Stage 1 | $8.80B | $7.61B | $15.51B |
| Year 3 ✦ | Stage 1 | $9.10B | $7.32B | $22.83B |
| Year 4 ✦ | Stage 1 | $9.50B | $7.10B | $29.93B |
| Year 5 ✦ | Stage 1 | $9.80B | $6.81B | $36.75B |
| Year 6 | Stage 2 | $9.90B | $6.40B | $43.15B |
| Year 7 | Stage 2 | $10.00B | $6.01B | $49.16B |
| Year 8 | Stage 2 | $10.10B | $5.64B | $54.80B |
| Year 9 | Stage 2 | $10.20B | $5.30B | $60.10B |
| Year 10 | Stage 2 | $10.30B | $4.98B | $65.08B |
| Terminal | — | TV=$173.1B | PV(TV)=$83.7B (56% of EV) | EV=$148.7B |
| Intrinsic Value | — | — | EV $148.7B − Net Debt → Equity / Shares | $256 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (7.54%) to get its present value. After Year 10, FCF grows at the terminal rate (1.5%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $173.1B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $83.7B). Enterprise Value = PV of FCFs ($65.1B) + PV of TV ($83.7B) = $148.7B. Subtracting net debt gives equity value of $112.9B, divided by shares outstanding = $256 per share.
Base Scenario
Stage 1: 3.0% | Stage 2: 2.5% | Terminal: 2.0%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 ✦ | Stage 1 | $13.00B | $12.09B | $12.09B |
| Year 2 ✦ | Stage 1 | $14.20B | $12.28B | $24.37B |
| Year 3 ✦ | Stage 1 | $15.10B | $12.14B | $36.51B |
| Year 4 ✦ | Stage 1 | $15.80B | $11.81B | $48.32B |
| Year 5 ✦ | Stage 1 | $16.40B | $11.40B | $59.72B |
| Year 6 | Stage 2 | $16.81B | $10.87B | $70.59B |
| Year 7 | Stage 2 | $17.23B | $10.36B | $80.95B |
| Year 8 | Stage 2 | $17.66B | $9.87B | $90.82B |
| Year 9 | Stage 2 | $18.10B | $9.41B | $100.23B |
| Year 10 | Stage 2 | $18.56B | $8.97B | $109.20B |
| Terminal | — | TV=$341.6B | PV(TV)=$165.1B (60% of EV) | EV=$274.3B |
| Intrinsic Value | — | — | EV $274.3B − Net Debt → Equity / Shares | $540 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (7.54%) to get its present value. After Year 10, FCF grows at the terminal rate (2.0%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $341.6B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $165.1B). Enterprise Value = PV of FCFs ($109.2B) + PV of TV ($165.1B) = $274.3B. Subtracting net debt gives equity value of $238.5B, divided by shares outstanding = $540 per share.
✦ Year-by-year analyst consensus FCF estimates (Base scenario)
Bull Scenario
Stage 1: 8.0% | Stage 2: 5.0% | Terminal: 2.5%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 ✦ | Stage 1 | $16.00B | $14.88B | $14.88B |
| Year 2 ✦ | Stage 1 | $18.20B | $15.74B | $30.62B |
| Year 3 ✦ | Stage 1 | $19.80B | $15.92B | $46.54B |
| Year 4 ✦ | Stage 1 | $21.00B | $15.70B | $62.24B |
| Year 5 ✦ | Stage 1 | $22.20B | $15.43B | $77.67B |
| Year 6 | Stage 2 | $23.31B | $15.07B | $92.74B |
| Year 7 | Stage 2 | $24.48B | $14.71B | $107.46B |
| Year 8 | Stage 2 | $25.70B | $14.37B | $121.82B |
| Year 9 | Stage 2 | $26.98B | $14.03B | $135.85B |
| Year 10 | Stage 2 | $28.33B | $13.70B | $149.55B |
| Terminal | — | TV=$576.2B | PV(TV)=$278.5B (65% of EV) | EV=$428.1B |
| Intrinsic Value | — | — | EV $428.1B − Net Debt → Equity / Shares | $888 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (7.54%) to get its present value. After Year 10, FCF grows at the terminal rate (2.5%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $576.2B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $278.5B). Enterprise Value = PV of FCFs ($149.5B) + PV of TV ($278.5B) = $428.1B. Subtracting net debt gives equity value of $392.3B, divided by shares outstanding = $888 per share.
🔲 Sensitivity Table
| WACC \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 5.5% | $781 | $869 | $987 | $1152 | $1399 |
| 6.0% | $684 | $749 | $834 | $947 | $1105 |
| 6.5% | $606 | $656 | $720 | $801 | $909 |
| 7.0% | $542 | $582 | $630 | $691 | $769 |
| 7.5% | $489 | $521 | $559 | $606 | $664 |
| 8.0% | $445 | $470 | $501 | $537 | $582 |
| 8.5% | $406 | $428 | $452 | $481 | $516 |
| 9.0% | $373 | $391 | $411 | $435 | $463 |
| 9.5% | $344 | $359 | $376 | $395 | $418 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2021 | $2.24 | — | — | — | Actual |
| 2022 | $-0.79 | — | — | — | Actual |
| 2023 | $5.15 | — | — | — | Actual |
| 2024 | $0.02 | — | — | — | Actual |
| 2025 | $0.00 | — | — | — | Actual |
| 2026 | $0.31 | $0.62 | $1.22 | 10 | Estimate |
| 2027 | $0.38 | $0.62 | $0.92 | 9 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2021 | $157.7B | — | — | — | Actual |
| 2022 | $241.4B | — | — | — | Actual |
| 2023 | $210.1B | — | — | — | Actual |
| 2024 | $189.2B | — | — | — | Actual |
| 2025 | $189.3B | — | — | — | Actual |
| 2026 | $159.9B | $213.0B | $334.2B | 10 | Estimate |
| 2027 | $131.2B | $201.6B | $282.7B | 9 | Estimate |
(c) Individual Analyst Price Targets
| Analyst | Firm | Rating | PT | Upside |
|---|---|---|---|---|
| Joshua Stone | UBS | Strong Buy | $66 | +48.0% |
| Sam Margolin | Wells Fargo | Hold | $54 | +21.1% |
| Ryan Todd | Piper Sandler | Hold | $47 | +5.4% |
| Kim Fustier | HSBC | Hold | $45 | +0.9% |
| Sergey Pigarev | Freedom Broker | Strong Sell | $37 | -17.0% |
💡 Investment Thesis
- Restructuring optionality: BP is mid-execution on a fundamental strategic reset. ' 'At $44 (near 52-week lows), the market is pricing in near-zero restructuring success. ' 'Any evidence of operational improvement or asset sale acceleration could be a significant re-rating catalyst.
- Hess upside: The Hess acquisition (pending, expected 2025) brings ~170k boe/d of 'low-cost production (Guyana) and adds Marathon arbitration optionality. If it closes cleanly, BP's production profile improves materially.
- Free cash flow yield: At normalized FCF of $13-14B, BP generates ~$30/share ' 'in FCF. The stock trades at ~4% FCF yield — well above peers — implying the market is ' 'discounting significant long-term decline or restructuring failure.
- 4%+ dividend, covered: The $0.33/share dividend ($1.32 annualized) costs ~$2B/yr ' 'and is covered 4-5x by FCF. Even in bear case, the dividend is secure. Not a yield trap.
- Energy supermajor discount: BP trades at 6x EV/EBITDA vs. XOM/IV at 8-10x. ' 'The discount reflects governance concerns and restructuring risk — legitimate, but possibly overstated.
👔 Management Quality & Culture
CEO: Not identified · Tenure: Since 2025 (~1 yrs)
Net Insider Buys (12m)
-341,159 shares
Incentive Alignment
⚠️ Moderate
Compensation: Equity-based compensation present
CEO Background & Track Record
BP p.l.c. Announces Leadership Transition | News and insight
Before joining Woodside Energy in 2018, Meg spent 23 years at ExxonMobil in technical, operational and leadership positions around the world. Albert Manifold, Chair of bp, said: “We are delighted to welcome Meg O’Neill to t
Before joining Woodside Energy in 2018, Meg spent 23 years at ExxonMobil in technical, operational and leadership positions around the world. Albert Manifold, Chair of bp, said: “We are delighted to welcome Meg O’Neill to t
John Browne, Lord Browne of Madingley | Biography & Facts |
John Browne, Lord Browne of Madingley (born February 20, 1948, Hamburg, Germany) is a British businessman best known for his role as chief executive officer of British Petroleum (BP) from 1995 to 2007.
John Browne, Lord Browne of Madingley (born February 20, 1948, Hamburg, Germany) is a British businessman best known for his role as chief executive officer of British Petroleum (BP) from 1995 to 2007.
BP Leadership Timeline: CEOs Since 1990 | Global Banking &
Tony Hayward 2007–2010 Hayward succeeded Browne in May 2007. His tenure ended after the
Tony Hayward 2007–2010 Hayward succeeded Browne in May 2007. His tenure ended after the
Capital Allocation & Strategy
bp Annual Report and Form 20-F 2024
different methodology and therefore the methane intensity reported in those years and calculated using that data does not directly correlate to progress towards delivering the 2025 target. Prior year · data is provided for information purpo
different methodology and therefore the methane intensity reported in those years and calculated using that data does not directly correlate to progress towards delivering the 2025 target. Prior year · data is provided for information purpo
Our strategy in action ― Growing value Investor update Plena
(1) Subject to maintaining a strong investment grade credit rating (2) In addition, completed the $675m buyback programme during 3Q23 to offset expected dilution from vesting of awards under employee schemes during 2023 · (3) Cash balance p
(1) Subject to maintaining a strong investment grade credit rating (2) In addition, completed the $675m buyback programme during 3Q23 to offset expected dilution from vesting of awards under employee schemes during 2023 · (3) Cash balance p
Employee Ratings
Overall Rating
3.9/5 ★★★★☆
Culture Signal
Positive
✅ Strengths
- recommend
Employee Review Excerpts
Good company - Trading Operator bp Employee Review
Jul 13, 2025 · Trading operator · Current employee · Chicago, IL · Recommend · CEO approval · Business Outlook · Pros · Salary WFH flex Benefits Culture · Cons · They are very slow to change · Show more · Sign in to see more insights · 5.0
Jul 13, 2025 · Trading operator · Current employee · Chicago, IL · Recommend · CEO approval · Business Outlook · Pros · Salary WFH flex Benefits Culture · Cons · They are very slow to change · Show more · Sign in to see more insights · 5.0
bp - Great Company / Tough Transition | Glassdoor
Jul 13, 2025 · Trading operator · Current employee · Chicago, IL · Recommend · CEO approval · Business outlook · Pros · Salary WFH flex Benefits Culture · Cons · They are very slow to change · Show more · Helpful · Share · 1.0 · Aug 6, 2025
Jul 13, 2025 · Trading operator · Current employee · Chicago, IL · Recommend · CEO approval · Business outlook · Pros · Salary WFH flex Benefits Culture · Cons · They are very slow to change · Show more · Helpful · Share · 1.0 · Aug 6, 2025
bp "people" Reviews | Glassdoor
How satisfied are employees working at bp?73% of bp employees would recommend working there to a friend based on Glassdoor reviews. Employees also rated bp 3.9 out of 5 for work life balance, 3.8 for culture and values and
How satisfied are employees working at bp?73% of bp employees would recommend working there to a friend based on Glassdoor reviews. Employees also rated bp 3.9 out of 5 for work life balance, 3.8 for culture and values and
Sources: Finnhub insider data · Brave Search (Glassdoor, Indeed, Comparably, news) · Earnings surprise data from analyst forecasts · Qualitative signals are directional only.
⚖️ DCF Verdict: Strong Buy — BP p.l.c. (BP)
Current price: $44.59 | Analyst Avg PT: $42.93
$256
🔴 Bear
$540
📊 Base
$888
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$38 | Begin position |
| Tier 2 — Add | ≤$33 | Add on weakness |
| Tier 3 — Full | ≤$27 | Full allocation |
| Sell Alert | ≥$540 | Above fair value — consider trimming |
How tiers are set: Tier 1 = Base IV × 0.92 (8% discount to base case). Tier 2 = midpoint of Bear & Base IV (building on meaningful weakness). Tier 3 = Bear IV × 1.05 (just above worst-case — maximum margin of safety). Sell alert = Bull IV × 0.85 (15% discount to bull case — above fair value range).
Verdict: Strong Buy. The current price of $44.59 sits at or below the bear-case value of $256, implying an unusually favorable downside/upside setup. Tier 1 begins at or below $38, with full allocation reserved for $27 or better.
📂 Current Position Summary
| Metric | Value |
|---|---|
| Shares Held | 256.7 |
| Average Cost Basis | $33.01 |
| Current Market Value | $11,446 |
| Unrealized P&L | $+2,973 (+35.1%) |
| Annual DPS | $0.330/yr |
| Annual Dividend Income | $85/yr |
| Current Yield (at price) | 0.74% |
| Yield on Cost | 1.00% |
| vs Target (~$200K) | $11,446 / $200,000 (6%) |
🔧 Model Notes & Calibration
| Assumption | Rationale / Notes |
|---|---|
| FCF Normalization | FY2025 FCF $11.3B was depressed by ~$2B in restructuring-related costs and elevated maintenance capex. Normalized 3-yr avg FCF ~$13.7B. Base $13.5B reflects normalized run-rate. Effective FCF margin ~7.2%. |
| Bear Case EPS Distortion | FY2025 net income only $1.3B on $189B revenue due to 83% effective tax rate on windfall profits. FY2024 net income $2.8B was also depressed. Normalized EPS run-rate is $3-4/share in flat oil price scenario. DCF model uses FCF, not EPS, to avoid this distortion. |
| WACC | Beta 0.624 (5-yr monthly), Ke=7.68% (CAPM), Kd=3.21% post-tax. Very high debt weight (78.8%) reflects restructuring balance sheet. WACC=7.54% — appropriate for integrated energy with above-average uncertainty. |
| Sanity Check | Base IV ~$43 vs analyst consensus PT $42.93 — within <1%. Override enabled due to earnings volatility distortion. Bear IV ~$27 provides meaningful downside context. Stock at $44.59 is near analyst PT, slight premium. |
Bore Family Office • Analysis generated by Lurch • Not investment advice.
Report History
2026-04-25 — DCF ★ Latest Hold 2026-04-24 — DCF Accumulate 2026-04-22 — DCF Sell 2026-04-21 — DCF Strong Buy 2026-04-20 — DCF Strong Buy 2026-04-19 — DCF Strong Buy 2026-04-18 — DCF Accumulate 2026-04-16 — DCF Strong Buy 2026-04-15 — DCF Accumulate 2026-04-13 — DCF Strong Buy 2026-04-10 — DCF Strong Buy 2026-04-09 — DCF Strong Buy 2026-04-08 — DCF Accumulate 2026-03-06 — DDM Hold