BP (BP/LN): Hold: Deleveraging underway

Research evidence excerpt

BP (BP/LN): Hold: Deleveraging underway

er planned 52-WEEK PRICE (GBPp)

turnaround activity. 640

Forecasts: We raise our 2Q earnings forecast to USD5.5bn, 50% (USD1.9bn) above 500

our previous estimate, with most of the positive revision coming from C&P.

What to look for on the call: (1) BP is well on its way to achieving its USD14-18bn 07/25 01/26 07/26

net debt target by end-2027, likely one year early thanks to a supportive macro Target price: 585 High: 606 Low: 396 Current: 516

environment in 2026. We estimate net debt (ex-leases, ex-hybrids) could shrink to as Source: LSEG IBES, HSBC estimates

little as USD5bn by end-2026 thanks to the Castrol sale. This raises questions about

capital allocation choices thereafter, notably on shareholder returns and specifically Kim Fustier*

Senior Global Oil & Gas Analyst

on buyback resumption (we assume a modest USD2bn buyback in 2027 at USD65/b HSBC Bank plc

Brent) and on investment. (2) Asset disposals: BP continues to prune its portfolio, kim.fustier@hsbc.com

+44 20 3359 2136

e.g. with the recent disposal of its interest in Bay du Nord to Equinor. Other assets up

Sadnan Ali*, CFA

for sale include LightsourceBP (which we think represents most of the USD1bn Global Oil & Gas Analyst

impairment in 2Q), US Gulf of America fields and potentially UK North Sea assets. HSBC Bank plc

sadnan.ali@hsbc.com

(3) Organisational and personnel changes. +44 207 9910569

Retain Hold, cut target price: We raise our 2026 net income forecast by 3% to Ujjwal Sharma*

Associate

reflect the positive 2Q trading statement and higher refining margin forecasts for Bangalore

2H26, offsetting our reduced 2026 Brent assumption of USD80/b (vs USD95/b

previously) - see Oil markets: Cutting forecasts: Mini-glut now, surplus later (8 July).