BP Suspends Buyback Program, Shares Drop
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 5 days ago
0mins
Should l Buy BP?
Source: seekingalpha
- Buyback Suspension: BP announced the suspension of its share buyback program, resulting in a 7.3% drop in stock price during Tuesday's trading, indicating a shift in focus towards debt reduction rather than shareholder returns amid financial challenges.
- Debt Target Unchanged: Despite potential savings from halting buybacks, BP has kept its net debt target unchanged at $14B-$18B through 2027, highlighting ongoing challenges in debt reduction, which surprised analysts given the expected savings.
- Capital Expenditure Cuts: BP plans to lower its capital expenditure cap for 2026 to $13.5B from $14.5B last year, while increasing its cost reduction target to $6.5B by the end of 2027, reflecting a strong emphasis on cost control and financial prudence.
- New Discovery Assessment: BP's Bumerangue discovery offshore Brazil, touted as the largest hydrocarbon find in 25 years, is set to undergo an appraisal program by year-end to assess commercial viability, with estimated reserves of 8B barrels of liquids, potentially driving future growth.
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Analyst Views on BP
Wall Street analysts forecast BP stock price to rise
11 Analyst Rating
5 Buy
5 Hold
1 Sell
Moderate Buy
Current: 37.190
Low
6.38
Averages
84.26
High
503.69
Current: 37.190
Low
6.38
Averages
84.26
High
503.69
About BP
BP p.l.c. is a United Kingdom-based integrated energy company. The Company's segments include Gas & low carbon energy, Oil production & operations, Customers & products, and Other businesses & corporate. Its gas business includes regions with upstream activities that produce natural gas, integrated gas and power, and gas trading. Its low carbon business includes solar, offshore and onshore wind, hydrogen and carbon capture and storage and power trading. Oil production & operations segment comprises regions with upstream activities that predominantly produce crude oil, including bpx energy. Customers & products segment comprises its customer-focused businesses, which include convenience and retail fuels, electric vehicle charging, as well as Castrol, aviation and business to business and midstream. It also includes its products businesses, refining and oil trading, as well as its bioenergy businesses. Other businesses & corporate segment comprises technology and bp ventures.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Tax Requirements: Under the new license, participating companies must pay oil and gas royalties or taxes to Venezuela or its state-run energy company, with these funds deposited into a U.S. Treasury account for foreign governments, ensuring transparency in fund allocation.
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- Revenue Source Insight: With approximately 75% of Compass's revenue denominated in dollars, this currency shift will align its financial reporting with market performance, thereby boosting investor confidence and potentially attracting more international investments.
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