BP
BP
Accumulate 2026-04-24
Model
DCF
Price at Report
$46.35
Base IV
$51.53
Bear IV
$22.24
Bull IV
$103.64
Entry Zone: 21-47 · Sell Above: 88
Bore Family Office
Valuation Report — BP p.l.c. (BP) • April 24, 2026
Unlevered DCF (FCFF @ WACC) • Discount Rate: 8.80% • Current Price: $46.35
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
BP is one of the world's largest integrated oil and gas companies, operating across upstream exploration & production, downstream refining & marketing, and a growing low-carbon energy transition business. Founded in 1909 as the Anglo-Persian Oil Company, BP has pivoted aggressively toward renewables since 2020, though hydrocarbons still generate >90% of earnings. The company faces structural decline in its legacy business but retains significant FCF generation at current commodity prices and a deep asset base with a 5%+ dividend yield.
| Business Segment | Revenue | % of Total | YoY Growth | Margin | Notes |
|---|---|---|---|---|---|
| Oil Production & Operations | $74,200M | 39% | -5.0% | — | Upstream: North Sea, GoM, Angola, Azerbaijan |
| Gas & Low Carbon Energy | $54,800M | 29% | +8.0% | — | Gas trading, wind, solar, EV charging |
| Customers & Products | $60,300M | 32% | -2.0% | — | Refining, retail, lubricants, convenience |
| Blended Growth Rate | — | 100% | -0.3% | — | Weighted avg across segments |
📊 Business Lifecycle Stage
Stage 1
Startup
Startup
Stage 2
Hyper Growth
Hyper Growth
Stage 3
Self Funding
Self Funding
Stage 4
Operating Leverage
Operating Leverage
Stage 5
Capital Return
Capital Return
Stage 6
Decline
Decline
Stage 6 — Decline: Revenue and margins declining. Forward cash flows unreliable — asset value, sum-of-parts, or liquidation analysis is most appropriate.
Why this drives model selection: Forward cash flows unreliable — asset value or liquidation analysis.
🔍 Quality Scorecard
| Metric | Value | Assessment |
|---|---|---|
| FCF Margin | 6.0% | 5–10% adequate |
| Debt / EBITDA | 3.6x | 2–4x moderate |
| Revenue Trend | Declining 3yr | 3-year directional trend |
| FCF Margin Trend | Stable (±1pp) | Directional margin trajectory |
| Analyst Revisions | Neutral | Last 90 days consensus direction |
✅ Quality profile supports the valuation
📊 Financial Snapshot
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue ($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 | $-2,487 | $8,115 | $5,538 |
| Net Margin | 4.8% | -1.0% | -1.2% | 4.3% | 2.9% |
| 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) | $61,200 | $43,400 | $41,200 | $46,300 | $98,000 |
💹 Capital Return & Share Count Analysis
Net Share Change
-21.7% (2021→2025)
📉 Net reduction — buybacks exceed issuances
EPS Amplification
EPS grew -99.1% vs net income -26.8% over the period — -72.3pp of EPS growth diluted by share issuance.
| Year | Diluted Shares (M) | YoY Change | Buyback Spend ($M) | Buyback Yield |
|---|---|---|---|---|
| 2021 | 3273.0M | — | $2,200 | 1.5% |
| 2022 | 3183.0M | -2.7% | $3,500 | 2.4% |
| 2023 | 2804.0M | -11.9% | $3,000 | 2.3% |
| 2024 | 2642.0M | -5.8% | $2,500 | 2.0% |
| 2025 | 2563.0M | -3.0% | $2,000 | 1.7% |
BP has been reducing shares consistently since 2021, retiring ~22% of shares over 4 years. Buybacks are conditioned on $60+ Brent and FCF coverage — lumpy and cycle-dependent.
⚙️ WACC Build (DCF)
| Input | Value | Notes |
|---|---|---|
| Risk-Free Rate (Rf) | 4.25% | 10-yr US Treasury yield |
| Beta (β) | 0.620 | Market beta (Finnhub) |
| Equity Risk Premium (ERP) | 5.5% | Damodaran US ERP |
| Cost of Equity (Ke) | 7.66% | Ke = Rf + β × ERP |
| Pre-Tax Cost of Debt | 4.50% | Interest exp / gross debt |
| After-Tax Cost of Debt (Kd) | 3.56% | × (1 − 21%) |
| Weight Equity (We) | 47.4% | Mkt cap $0.0B |
| Weight Debt (Wd) | 52.6% | Gross debt $0.0B |
| WACC | 8.80% | DCF discount rate |
📈 DCF Scenarios
$22
🔴 Bear
$52
📊 Base
$104
🚀 Bull
$46.35
Current Price
$44
Analyst Avg PT
| Scenario | Stage 1 (Yrs 1–5) | Stage 2 (Yrs 6–10) | Terminal g | WACC | Intrinsic Value | vs Price |
|---|---|---|---|---|---|---|
| 🔴 Bear | 1.0% | 1.0% | 2.0% | 10.30% | $22 | ▼52.0% |
| 📊 Base | 3.0% | 2.0% | 2.5% | 8.80% | $52 | ▲11.2% |
| 🚀 Bull | 6.0% | 4.0% | 3.0% | 7.80% | $104 | ▲123.6% |
📋 Full 10-Year Projection Tables
Bear Scenario
Stage 1: 1.0% | Stage 2: 1.0% | Terminal: 2.0%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 ✦ | Stage 1 | $8.00B | $7.25B | $7.25B |
| Year 2 ✦ | Stage 1 | $8.50B | $6.99B | $14.24B |
| Year 3 ✦ | Stage 1 | $9.00B | $6.71B | $20.95B |
| Year 4 ✦ | Stage 1 | $9.40B | $6.35B | $27.30B |
| Year 5 ✦ | Stage 1 | $9.80B | $6.00B | $33.30B |
| Year 6 | Stage 2 | $9.90B | $5.50B | $38.80B |
| Year 7 | Stage 2 | $10.00B | $5.03B | $43.83B |
| Year 8 | Stage 2 | $10.10B | $4.61B | $48.44B |
| Year 9 | Stage 2 | $10.20B | $4.22B | $52.66B |
| Year 10 | Stage 2 | $10.30B | $3.86B | $56.52B |
| Terminal | — | TV=$126.6B | PV(TV)=$47.5B (46% of EV) | EV=$104.0B |
| Intrinsic Value | — | — | EV $104.0B − Net Debt → Equity / Shares | $22 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (10.30%) 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) = $126.6B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $47.5B). Enterprise Value = PV of FCFs ($56.5B) + PV of TV ($47.5B) = $104.0B. Subtracting net debt gives equity value of $57.0B, divided by shares outstanding = $22 per share.
Base Scenario
Stage 1: 3.0% | Stage 2: 2.0% | Terminal: 2.5%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 ✦ | Stage 1 | $11.27B | $10.36B | $10.36B |
| Year 2 ✦ | Stage 1 | $11.61B | $9.81B | $20.17B |
| Year 3 ✦ | Stage 1 | $11.96B | $9.29B | $29.45B |
| Year 4 ✦ | Stage 1 | $12.32B | $8.79B | $38.25B |
| Year 5 ✦ | Stage 1 | $12.69B | $8.32B | $46.57B |
| Year 6 | Stage 2 | $12.94B | $7.80B | $54.37B |
| Year 7 | Stage 2 | $13.20B | $7.32B | $61.69B |
| Year 8 | Stage 2 | $13.47B | $6.86B | $68.55B |
| Year 9 | Stage 2 | $13.74B | $6.43B | $74.98B |
| Year 10 | Stage 2 | $14.01B | $6.03B | $81.01B |
| Terminal | — | TV=$228.0B | PV(TV)=$98.1B (55% of EV) | EV=$179.1B |
| Intrinsic Value | — | — | EV $179.1B − Net Debt → Equity / Shares | $52 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (8.80%) 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) = $228.0B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $98.1B). Enterprise Value = PV of FCFs ($81.0B) + PV of TV ($98.1B) = $179.1B. Subtracting net debt gives equity value of $132.1B, divided by shares outstanding = $52 per share.
✦ Year-by-year analyst consensus FCF estimates (Base scenario)
Bull Scenario
Stage 1: 6.0% | Stage 2: 4.0% | Terminal: 3.0%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 ✦ | Stage 1 | $13.00B | $12.06B | $12.06B |
| Year 2 ✦ | Stage 1 | $13.80B | $11.88B | $23.93B |
| Year 3 ✦ | Stage 1 | $14.60B | $11.65B | $35.59B |
| Year 4 ✦ | Stage 1 | $15.50B | $11.48B | $47.07B |
| Year 5 ✦ | Stage 1 | $16.50B | $11.33B | $58.40B |
| Year 6 | Stage 2 | $17.16B | $10.93B | $69.34B |
| Year 7 | Stage 2 | $17.85B | $10.55B | $79.88B |
| Year 8 | Stage 2 | $18.56B | $10.18B | $90.06B |
| Year 9 | Stage 2 | $19.30B | $9.82B | $99.88B |
| Year 10 | Stage 2 | $20.07B | $9.47B | $109.35B |
| Terminal | — | TV=$430.8B | PV(TV)=$203.3B (65% of EV) | EV=$312.6B |
| Intrinsic Value | — | — | EV $312.6B − Net Debt → Equity / Shares | $104 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (7.80%) to get its present value. After Year 10, FCF grows at the terminal rate (3.0%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $430.8B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $203.3B). Enterprise Value = PV of FCFs ($109.4B) + PV of TV ($203.3B) = $312.6B. Subtracting net debt gives equity value of $265.6B, divided by shares outstanding = $104 per share.
🔲 Sensitivity Table
| WACC \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 6.8% | $73 | $79 | $87 | $96 | $109 |
| 7.3% | $65 | $70 | $76 | $83 | $92 |
| 7.8% | $59 | $62 | $67 | $73 | $80 |
| 8.3% | $53 | $56 | $60 | $64 | $70 |
| 8.8% | $48 | $51 | $54 | $57 | $62 |
| 9.3% | $44 | $46 | $48 | $51 | $55 |
| 9.8% | $40 | $42 | $44 | $46 | $49 |
| 10.3% | $36 | $38 | $40 | $42 | $44 |
| 10.8% | $33 | $35 | $36 | $38 | $40 |
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.
🏦 Comparable Valuation
| Company | Ticker | P/E | EV/EBITDA | P/FCF | Div Yield | Notes |
|---|---|---|---|---|---|---|
| Chevron | CVX | 28.3x | 10.2x | 11.2x | 3.6% | US integrated; premium valuation |
| Shell | SHEL | 11.5x | 5.8x | 8.4x | 3.8% | European peer; similar discount |
| TotalEnergies | TTE | 9.2x | 5.1x | 7.8x | 5.1% | European peer; transition leader |
| ExxonMobil | XOM | 13.8x | 7.6x | 12.5x | 3.3% | US super-major; scale premium |
| BP 5yr Avg | BP | — | 5.5x | 8.0x | 5.5% | Own history: deep discount to peers |
💰 Dividend / Distribution Analysis
| Metric | Value |
|---|---|
| Annual DPS | $0.330 |
| Current Yield | 0.71% |
| Consecutive Growth Years | 3 |
| 1-yr DPS CAGR | +5.4% |
| 3-yr DPS CAGR | +5.0% |
| 5-yr DPS CAGR | +8.5% |
| 10-yr DPS CAGR | — |
| Payout Ratio (DPS/EPS) | 16.5% |
| FCF Payout Ratio | 7.5% |
| Sustainability Verdict | Watch |
BP's dividend was cut 50% in 2020 and restored with growth since. FCF comfortably covers the dividend, but BP's variable buyback policy means total capital return is cycle-dependent. Payout looks safe at $60+ Brent but vulnerable below $50.
🔮 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 | $0.14 | — | — | — | Actual |
| 2025 | $0.02 | — | — | — | Actual |
| 2026 | $0.31 | $0.62 | $1.22 | 24 | Estimate |
| 2027 | $0.38 | $0.62 | $0.92 | 24 | 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 | 24 | Estimate |
| 2027 | $131.2B | $201.6B | $282.7B | 24 | Estimate |
(c) Individual Analyst Price Targets
| Analyst | Firm | Rating | PT | Upside |
|---|---|---|---|---|
| Joshua Stone | UBS | Strong Buy | $66 | +42.4% |
| Paul Cheng | Scotiabank | Buy | $58 | +25.1% |
| Sam Margolin | Wells Fargo | Hold | $54 | +16.5% |
| Ryan Todd | Piper Sandler | Hold | $47 | +1.4% |
| Kim Fustier | HSBC | Hold | $45 | -2.9% |
💡 Investment Thesis
- Deep value on cycle-adjusted FCF: At ~5.3× normalized FCF and 5%+ yield, BP prices in permanent decline — any stabilization of oil prices or cost discipline drives material re-rating.
- Energy transition optionality: BP's low-carbon investments (wind, solar, EV charging) provide a long-dated call option on the energy transition, though execution risk remains high.
- Buyback discipline: BP has committed $3.5B/yr in buybacks at $60+ Brent, reducing shares and supporting per-share metrics.
- Key risk — oil price collapse: A sustained period of sub-$50 Brent would compress FCF below dividend coverage and force another distribution cut (as in 2020). The balance sheet carries elevated leverage (debt/equity 1.37×).
👔 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
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
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
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: Accumulate — BP p.l.c. (BP)
Current price: $46.35 | Analyst Avg PT: $44.43
$22
🔴 Bear
$52
📊 Base
$104
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$47 | Begin position |
| Tier 2 — Add | ≤$37 | Add on weakness |
| Tier 3 — Full | ≤$21 | Full allocation |
| Sell Alert | ≥$88 | 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: Hold. BP offers a compelling 5%+ yield and deep value on cycle-adjusted FCF, but the structural decline of the oil business and elevated balance sheet risk warrant patience. Accumulate below $40 on Brent weakness; full position only if debt reduces below $30B net.
📂 Current Position Summary
| Metric | Value |
|---|---|
| Shares Held | 256.6764616782793 |
| Average Cost Basis | $33.01 |
| Current Market Value | $11,897 |
| Unrealized P&L | $+3,424 (+40.4%) |
| Annual DPS | $0.330/yr |
| Annual Dividend Income | $85/yr |
| Current Yield (at price) | 0.71% |
| Yield on Cost | 1.00% |
| vs Target (~$200K) | $11,897 / $200,000 (6%) |
🔧 Model Notes & Calibration
| Assumption | Rationale / Notes |
|---|---|
| Model Selection | Used DCF (not DDM) because BP's dividend is variable and recently restored after a 2020 cut. DCF on cycle-adjusted FCF is more appropriate for oil majors with lumpy earnings. |
| Oil/Energy Adjusted Quality | Used sector-adjusted rubric — generic ROIC/FCF margin thresholds would incorrectly classify all oil majors as weak. Judge against cycle-aware norms: balance sheet strength, FCF durability, capital allocation discipline. |
| FCF Base | FY2025 FCF of $11.3B is depressed vs $28.9B peak in 2022. Used FY2025 as base (conservative) rather than normalizing upward — reflects current cycle positioning. |
| WACC | Blended rate 8.8% — above pure Ke of 7.7% to reflect energy transition risk premium and leverage (debt/equity 1.37×, debt >50% of capital). |
| Lifecycle | Classifier returned "unknown" — analyst judgment: Stage 6 (Decline). Legacy oil business in structural decline; transition business not yet scaled to replace earnings. Deep value but terminal risk is real. |
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