BP's Sale of Castrol Stake and Profitability Questions
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Should l Buy BP?
Source: seekingalpha
- Castrol Stake Sale: BP's plan to sell a 65% stake in Castrol could generate significant cash inflow and optimize asset allocation, thereby enhancing its competitive position in the lubricants market.
- Dividend Declaration: BP has declared a quarterly dividend of $0.4992 per ADS, although share buybacks for 2026 have been suspended, indicating a more cautious approach to capital allocation in light of future uncertainties.
- Earnings Beat: BP exceeded top-line estimates in Q4, demonstrating resilience in the oil and gas market while laying a positive foundation for Q1 and FY26 outlook, which may attract more investor interest.
- Future Outlook: By divesting its Castrol stake, BP not only improves its financial standing but also potentially funds investments in renewable energy, reflecting strategic adjustments during its transformation process.
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Analyst Views on BP
Wall Street analysts forecast BP stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for BP is 84.26 USD with a low forecast of 6.38 USD and a high forecast of 503.69 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
11 Analyst Rating
5 Buy
5 Hold
1 Sell
Moderate Buy
Current: 39.010
Low
6.38
Averages
84.26
High
503.69
Current: 39.010
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.
BP Set to Report Q4 Earnings Amid Shareholder Pressure
- Earnings Expectations: BP is set to report its fourth-quarter earnings on February 10, with Wall Street expecting an EPS of $0.60, reflecting a 36.4% year-over-year growth, although revenue is projected to decline by 7.5% to $42.33 billion, indicating challenges in the company's strategic pivot.
- Shareholder Pressure: Amid pressure from shareholder activists and pension funds, BP is urged to clarify its capital expenditure strategy in oil and gas investments to ensure acceptable returns on new projects, highlighting the urgency of its strategic transformation.
- Market Performance: Year-to-date, BP's shares have underperformed major peers like Exxon Mobil and Chevron, reflecting ongoing operational and strategic challenges, with analysts asserting that the fourth-quarter report must clearly demonstrate tangible improvements from the company's streamlining efforts.
- Earnings Estimate Revisions: Over the past two years, BP has beaten EPS estimates 63% of the time and revenue estimates 50% of the time, but recent earnings forecasts show 4 upward revisions and 5 downward revisions, indicating market divergence regarding its future performance.
See More
BP's Sale of Castrol Stake and Profitability Questions
- Castrol Stake Sale: BP's plan to sell a 65% stake in Castrol could generate significant cash inflow and optimize asset allocation, thereby enhancing its competitive position in the lubricants market.
- Dividend Declaration: BP has declared a quarterly dividend of $0.4992 per ADS, although share buybacks for 2026 have been suspended, indicating a more cautious approach to capital allocation in light of future uncertainties.
- Earnings Beat: BP exceeded top-line estimates in Q4, demonstrating resilience in the oil and gas market while laying a positive foundation for Q1 and FY26 outlook, which may attract more investor interest.
- Future Outlook: By divesting its Castrol stake, BP not only improves its financial standing but also potentially funds investments in renewable energy, reflecting strategic adjustments during its transformation process.
See More
BP Declares Quarterly Dividend and Provides Future Outlook
- Quarterly Dividend Announcement: BP declares a quarterly dividend of $0.4992 per ADS, demonstrating its commitment to shareholders despite market volatility, aimed at maintaining investor confidence and stabilizing stock performance.
- Buyback Plan Suspension: BP announces the suspension of its stock buyback plan for 2026, a decision that may influence market perceptions of the company's capital allocation strategy, reflecting a cautious approach in an uncertain economic environment.
- Earnings Beat Expectations: BP's fourth-quarter revenue exceeds market expectations, showcasing its resilience in the current economic climate, which is expected to lay a foundation for future financial performance and enhance investor confidence in the company's long-term growth.
- Future Outlook: BP initiates its outlook for Q1 and FY26, indicating a positive stance towards future market opportunities, aiming to enhance profitability through strategic adjustments and market adaptability.
See More
BP Declares Quarterly Dividend and Suspends Buyback
- Quarterly Dividend Announcement: BP declares a quarterly dividend of $0.4992 per ADS, maintaining a forward yield of 5.09%, which reflects the company's ongoing ability to generate stable cash flow despite market fluctuations.
- Buyback Suspension: The board has decided to suspend the share buyback program and fully allocate excess cash to strengthen the balance sheet, aiming to create a robust financial foundation for future investments, particularly in its distinctive oil and gas opportunities.
- Shareholder Record Date: The dividend is payable on March 27, with a record date of February 20 and an ex-dividend date also on February 20, ensuring shareholders receive timely returns, highlighting the company's commitment to shareholder value.
- Future Investment Strategy: BP emphasizes a disciplined approach to investing in its deep reservoir of oil and gas opportunities, indicating a strategic shift in response to the current economic environment, aimed at enhancing long-term profitability and market competitiveness.
See More
BP Q4 Earnings Beat Expectations, Share Buyback Suspended
- Strong Earnings Report: BP's Q4 non-GAAP EPS of $0.60 aligns with expectations, while revenue of $47.38 billion, up 3.6% year-over-year, beats forecasts by $5.05 billion, indicating robust performance in a challenging market.
- Cash Flow and Expenditure: Operating cash flow for Q4 was $7.6 billion and $24.5 billion for the full year, providing a solid financial foundation for future investments despite a decline compared to 2024 figures.
- Capital Expenditure Plans: BP expects capital expenditures to range between $13-13.5 billion in 2026, primarily weighted towards the first half, reflecting a stable investment strategy in oil and gas despite a slight anticipated decrease in upstream production.
- Structural Cost Reductions: The target for structural cost reductions has been raised to $5.5-6.5 billion by the end of 2027, aiming to optimize resource allocation and enhance financial flexibility through the divestment of businesses like Castrol.
See More
BP Reports Wider Q4 Loss Despite Higher Sales
- Wider Loss Reported: BP reported a replacement cost loss of $2.76 billion in Q4, widening from last year's $1.95 billion loss, indicating challenges in a weak oil price environment that may affect investor confidence.
- Earnings Meet Expectations: Despite the overall loss, BP's underlying replacement cost profit was $1.54 billion, exceeding market expectations of 10 cents per share, demonstrating the company's resilience amid adversity.
- Share Buyback Suspended: The board's decision to suspend the share buyback and allocate excess cash to strengthen the balance sheet aims to enhance financial stability, which could positively impact future investments.
- Cautious Outlook: BP anticipates slightly lower upstream production in fiscal 2026 and seasonally lower volumes in its customer business, with divestment proceeds expected to be between $9 billion and $10 billion, reflecting a cautious approach in an uncertain market environment.
See More
BP Set to Report Q4 Earnings Amid Shareholder Pressure
- Earnings Expectations: BP is set to report its fourth-quarter earnings on February 10, with Wall Street expecting an EPS of $0.60, reflecting a 36.4% year-over-year growth, although revenue is projected to decline by 7.5% to $42.33 billion, indicating challenges in the company's strategic pivot.
- Shareholder Pressure: Amid pressure from shareholder activists and pension funds, BP is urged to clarify its capital expenditure strategy in oil and gas investments to ensure acceptable returns on new projects, highlighting the urgency of its strategic transformation.
- Market Performance: Year-to-date, BP's shares have underperformed major peers like Exxon Mobil and Chevron, reflecting ongoing operational and strategic challenges, with analysts asserting that the fourth-quarter report must clearly demonstrate tangible improvements from the company's streamlining efforts.
- Earnings Estimate Revisions: Over the past two years, BP has beaten EPS estimates 63% of the time and revenue estimates 50% of the time, but recent earnings forecasts show 4 upward revisions and 5 downward revisions, indicating market divergence regarding its future performance.
See More
BP's Sale of Castrol Stake and Profitability Questions
- Castrol Stake Sale: BP's plan to sell a 65% stake in Castrol could generate significant cash inflow and optimize asset allocation, thereby enhancing its competitive position in the lubricants market.
- Dividend Declaration: BP has declared a quarterly dividend of $0.4992 per ADS, although share buybacks for 2026 have been suspended, indicating a more cautious approach to capital allocation in light of future uncertainties.
- Earnings Beat: BP exceeded top-line estimates in Q4, demonstrating resilience in the oil and gas market while laying a positive foundation for Q1 and FY26 outlook, which may attract more investor interest.
- Future Outlook: By divesting its Castrol stake, BP not only improves its financial standing but also potentially funds investments in renewable energy, reflecting strategic adjustments during its transformation process.
See More
BP Declares Quarterly Dividend and Provides Future Outlook
- Quarterly Dividend Announcement: BP declares a quarterly dividend of $0.4992 per ADS, demonstrating its commitment to shareholders despite market volatility, aimed at maintaining investor confidence and stabilizing stock performance.
- Buyback Plan Suspension: BP announces the suspension of its stock buyback plan for 2026, a decision that may influence market perceptions of the company's capital allocation strategy, reflecting a cautious approach in an uncertain economic environment.
- Earnings Beat Expectations: BP's fourth-quarter revenue exceeds market expectations, showcasing its resilience in the current economic climate, which is expected to lay a foundation for future financial performance and enhance investor confidence in the company's long-term growth.
- Future Outlook: BP initiates its outlook for Q1 and FY26, indicating a positive stance towards future market opportunities, aiming to enhance profitability through strategic adjustments and market adaptability.
See More
BP Declares Quarterly Dividend and Suspends Buyback
- Quarterly Dividend Announcement: BP declares a quarterly dividend of $0.4992 per ADS, maintaining a forward yield of 5.09%, which reflects the company's ongoing ability to generate stable cash flow despite market fluctuations.
- Buyback Suspension: The board has decided to suspend the share buyback program and fully allocate excess cash to strengthen the balance sheet, aiming to create a robust financial foundation for future investments, particularly in its distinctive oil and gas opportunities.
- Shareholder Record Date: The dividend is payable on March 27, with a record date of February 20 and an ex-dividend date also on February 20, ensuring shareholders receive timely returns, highlighting the company's commitment to shareholder value.
- Future Investment Strategy: BP emphasizes a disciplined approach to investing in its deep reservoir of oil and gas opportunities, indicating a strategic shift in response to the current economic environment, aimed at enhancing long-term profitability and market competitiveness.
See More
BP Q4 Earnings Beat Expectations, Share Buyback Suspended
- Strong Earnings Report: BP's Q4 non-GAAP EPS of $0.60 aligns with expectations, while revenue of $47.38 billion, up 3.6% year-over-year, beats forecasts by $5.05 billion, indicating robust performance in a challenging market.
- Cash Flow and Expenditure: Operating cash flow for Q4 was $7.6 billion and $24.5 billion for the full year, providing a solid financial foundation for future investments despite a decline compared to 2024 figures.
- Capital Expenditure Plans: BP expects capital expenditures to range between $13-13.5 billion in 2026, primarily weighted towards the first half, reflecting a stable investment strategy in oil and gas despite a slight anticipated decrease in upstream production.
- Structural Cost Reductions: The target for structural cost reductions has been raised to $5.5-6.5 billion by the end of 2027, aiming to optimize resource allocation and enhance financial flexibility through the divestment of businesses like Castrol.
See More
BP Reports Wider Q4 Loss Despite Higher Sales
- Wider Loss Reported: BP reported a replacement cost loss of $2.76 billion in Q4, widening from last year's $1.95 billion loss, indicating challenges in a weak oil price environment that may affect investor confidence.
- Earnings Meet Expectations: Despite the overall loss, BP's underlying replacement cost profit was $1.54 billion, exceeding market expectations of 10 cents per share, demonstrating the company's resilience amid adversity.
- Share Buyback Suspended: The board's decision to suspend the share buyback and allocate excess cash to strengthen the balance sheet aims to enhance financial stability, which could positively impact future investments.
- Cautious Outlook: BP anticipates slightly lower upstream production in fiscal 2026 and seasonally lower volumes in its customer business, with divestment proceeds expected to be between $9 billion and $10 billion, reflecting a cautious approach in an uncertain market environment.
See More
