BP
BP
Hold 2026-04-25
Model
DCF
Price at Report
$46.25
Base IV
$46.91
Bear IV
$33.96
Bull IV
$64.42
Entry Zone: 32-43 · Sell Above: 55
Bore Family Office
Valuation Report — BP p.l.c. (BP) • April 25, 2026
DCF w/ Exit Multiple (FCFF @ WACC) • Discount Rate: 6.54% • Current Price: $46.25
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
BP p.l.c. is one of the world's largest integrated oil and gas supermajors, headquartered in London. Operations span upstream exploration and production, downstream refining and marketing, and a growing low-carbon energy portfolio including offshore wind, EV charging, and renewable natural gas. BP serves customers in 70+ countries and has committed to net-zero by 2050.
The integrated model provides natural hedges across the commodity cycle. Downstream earnings tend to rise when upstream falls (crack spreads widen as oil prices decline), giving BP more earnings stability than pure-play E&P companies.
Recent developments: BP expects "exceptional" oil trading results for Q1 2026 amid elevated Brent prices ($105/bbl) driven by Iran-US tensions. Morgan Stanley upgraded BP to Overweight (PT $49.40) in March 2026. Shareholders rejected two climate disclosure resolutions at the April 2026 AGM.
| Business Segment | Revenue | % of Total | YoY Growth | Margin | Notes |
|---|---|---|---|---|---|
| Oil Production & Operations | $72,000M | 38% | -4.0% | 22.0% | Upstream; price-sensitive but high-margin |
| Gas & Low Carbon Energy | $57,000M | 30% | +2.0% | 12.0% | Gas, LNG, wind, solar; transition growth engine |
| Customers & Products | $60,000M | 32% | -1.0% | 5.0% | Refining, marketing, EV charging; stable cashflows |
| Blended Growth Rate | — | 100% | -1.2% | — | Weighted avg across segments |
📊 Business Lifecycle Stage
Stage 1
Startup
Startup
Stage 2
Hyper Growth
Hyper Growth
Stage 3
Self Funding
Self Funding
Stage 4
Operating Leverage
Operating Leverage
Stage 5
Capital Return
Capital Return
Stage 6
Decline
Decline
Stage 5 — Capital Return: Mature business returning capital via dividends and buybacks. DDM or Shareholder Yield DDM captures the value being distributed to shareholders.
Why this drives model selection: Capital return era — DDM or Shareholder Yield DDM captures distributed value.
🔍 Quality Scorecard
| Metric | Value | Assessment |
|---|---|---|
| ROIC | 6.5% | <8% weak |
| FCF Margin | 6.0% | 5–10% adequate |
| Debt / EBITDA | 1.1x | ≤2x conservative |
| Revenue Trend | Mixed | 3-year directional trend |
| FCF Margin Trend | declining | Directional margin trajectory |
| Analyst Revisions | Downward revisions | Last 90 days consensus direction |
⚠️ Elevated value trap risk — verify thesis before acting
📊 Financial Snapshot
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue ($M) | $164,300 | $246,300 | $200,900 | $202,800 | $189,000 |
| Rev YoY Growth | — | +49.9% | -18.4% | +0.9% | -6.8% |
| Gross Margin | 30.4% | 30.1% | 30.2% | 30.3% | 30.0% |
| EBITDA ($M) | $33,600 | $51,700 | $40,400 | $37,100 | $34,700 |
| EBITDA Margin | 20.5% | 21.0% | 20.1% | 18.3% | 18.4% |
| Operating Income ($M) | $19,600 | $36,100 | $24,300 | $21,400 | $18,400 |
| Operating Margin | 11.9% | 14.7% | 12.1% | 10.6% | 9.7% |
| Net Income ($M) | $11,100 | $27,600 | $15,200 | $17,700 | $12,300 |
| Net Margin | 6.8% | 11.2% | 7.6% | 8.7% | 6.5% |
| EPS (diluted) | $4.26 | $10.58 | $5.83 | $6.78 | $4.72 |
| Free Cash Flow ($M) | $8,300 | $20,600 | $12,600 | $10,100 | $11,300 |
| Annual DPS | $1.620 | $1.840 | $1.950 | $1.920 | $1.680 |
| Total Debt ($M) | $42,300 | $39,900 | $40,800 | $40,100 | $39,780 |
💹 Capital Return & Share Count Analysis
Net Share Change
-1.2% (2021→2025)
📉 Net reduction — buybacks exceed issuances
| Year | Diluted Shares (M) | YoY Change | Buyback Spend ($M) | Buyback Yield |
|---|---|---|---|---|
| 2021 | 2640.0M | — | — | — |
| 2022 | 2630.0M | -0.4% | — | — |
| 2023 | 2620.0M | -0.4% | — | — |
| 2024 | 2610.0M | -0.4% | — | — |
| 2025 | 2608.0M | -0.1% | — | — |
⚙️ WACC Build (DCF)
| Input | Value | Notes |
|---|---|---|
| Risk-Free Rate (Rf) | 4.30% | 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) | 7.71% | Ke = Rf + β × ERP |
| Pre-Tax Cost of Debt | 3.95% | Interest exp / gross debt |
| After-Tax Cost of Debt (Kd) | 3.12% | × (1 − 21%) |
| Weight Equity (We) | 68.9% | Mkt cap $0.0B |
| Weight Debt (Wd) | 31.1% | Gross debt $0.0B |
| WACC | 6.54% | DCF discount rate |
📈 DCF Scenarios
$34
🔴 Bear
$47
📊 Base
$64
🚀 Bull
$46.25
Current Price
$50
Analyst Avg PT
| Scenario | Stage 1 (Yrs 1–5) | Stage 2 (Yrs 6–10) | Terminal g | Exit Mult (EV/EBITDA) | WACC | Intrinsic Value | vs Price |
|---|---|---|---|---|---|---|---|
| 🔴 Bear | 0.5% | 0.0% | 1.5% | 5.5× | 8.04% | $34 | ▼26.6% |
| 📊 Base | 1.0% | 0.5% | 2.0% | 6.0× | 6.54% | $47 | ▲1.4% |
| 🚀 Bull | 2.0% | 1.0% | 2.5% | 7.0× | 6.04% | $64 | ▲39.3% |
📋 Full 10-Year Projection Tables
Bear Scenario
Stage 1: 0.5% | Stage 2: 0.0% | Terminal: 1.5%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $12.06B | $11.16B | $11.16B |
| Year 2 | Stage 1 | $12.12B | $10.38B | $21.55B |
| Year 3 | Stage 1 | $12.18B | $9.66B | $31.20B |
| Year 4 | Stage 1 | $12.24B | $8.98B | $40.19B |
| Year 5 | Stage 1 | $12.30B | $8.36B | $48.55B |
| Year 6 | Stage 2 | $12.30B | $7.74B | $56.28B |
| Year 7 | Stage 2 | $12.30B | $7.16B | $63.44B |
| Year 8 | Stage 2 | $12.30B | $6.63B | $70.07B |
| Year 9 | Stage 2 | $12.30B | $6.13B | $76.20B |
| Year 10 | Stage 2 | $12.30B | $5.68B | $81.88B |
| Terminal | — | TV=$137.5B | PV(TV)=$63.5B (44% of EV) | EV=$145.3B |
| Intrinsic Value | — | — | EV $145.3B − Net Debt → Equity / Shares | $34 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (8.04%) to get its present value. After Year 10, an exit multiple approach values the company at 5.5× EV/EBITDA (Year 10 EBITDA = $25.0B), giving a terminal value of $137.5B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $63.5B). Enterprise Value = PV of FCFs ($81.9B) + PV of TV ($63.5B) = $145.3B. Subtracting net debt gives equity value of $88.5B, divided by shares outstanding = $34 per share.
Base Scenario
Stage 1: 1.0% | Stage 2: 0.5% | Terminal: 2.0%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $12.12B | $11.38B | $11.38B |
| Year 2 | Stage 1 | $12.24B | $10.78B | $22.16B |
| Year 3 | Stage 1 | $12.36B | $10.22B | $32.38B |
| Year 4 | Stage 1 | $12.49B | $9.69B | $42.08B |
| Year 5 | Stage 1 | $12.61B | $9.19B | $51.26B |
| Year 6 | Stage 2 | $12.68B | $8.67B | $59.93B |
| Year 7 | Stage 2 | $12.74B | $8.18B | $68.11B |
| Year 8 | Stage 2 | $12.80B | $7.71B | $75.82B |
| Year 9 | Stage 2 | $12.87B | $7.28B | $83.09B |
| Year 10 | Stage 2 | $12.93B | $6.86B | $89.96B |
| Terminal | — | TV=$168.0B | PV(TV)=$89.2B (50% of EV) | EV=$179.1B |
| Intrinsic Value | — | — | EV $179.1B − Net Debt → Equity / Shares | $47 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (6.54%) to get its present value. After Year 10, an exit multiple approach values the company at 6.0× EV/EBITDA (Year 10 EBITDA = $28.0B), giving a terminal value of $168.0B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $89.2B). Enterprise Value = PV of FCFs ($90.0B) + PV of TV ($89.2B) = $179.1B. Subtracting net debt gives equity value of $122.3B, divided by shares outstanding = $47 per share.
Bull Scenario
Stage 1: 2.0% | Stage 2: 1.0% | Terminal: 2.5%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $12.24B | $11.54B | $11.54B |
| Year 2 | Stage 1 | $12.48B | $11.10B | $22.65B |
| Year 3 | Stage 1 | $12.73B | $10.68B | $33.33B |
| Year 4 | Stage 1 | $12.99B | $10.27B | $43.60B |
| Year 5 | Stage 1 | $13.25B | $9.88B | $53.48B |
| Year 6 | Stage 2 | $13.38B | $9.41B | $62.89B |
| Year 7 | Stage 2 | $13.52B | $8.96B | $71.86B |
| Year 8 | Stage 2 | $13.65B | $8.54B | $80.40B |
| Year 9 | Stage 2 | $13.79B | $8.13B | $88.53B |
| Year 10 | Stage 2 | $13.92B | $7.75B | $96.28B |
| Terminal | — | TV=$231.0B | PV(TV)=$128.5B (57% of EV) | EV=$224.8B |
| Intrinsic Value | — | — | EV $224.8B − Net Debt → Equity / Shares | $64 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (6.04%) to get its present value. After Year 10, an exit multiple approach values the company at 7.0× EV/EBITDA (Year 10 EBITDA = $33.0B), giving a terminal value of $231.0B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $128.5B). Enterprise Value = PV of FCFs ($96.3B) + PV of TV ($128.5B) = $224.8B. Subtracting net debt gives equity value of $168.0B, divided by shares outstanding = $64 per share.
🔲 Sensitivity Table
| WACC \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 4.5% | $124 | $147 | $180 | $236 | $347 |
| 5.0% | $104 | $119 | $140 | $172 | $225 |
| 5.5% | $88 | $99 | $114 | $134 | $165 |
| 6.0% | $76 | $84 | $95 | $109 | $128 |
| 6.5% | $66 | $73 | $80 | $91 | $104 |
| 7.0% | $59 | $63 | $69 | $77 | $87 |
| 7.5% | $52 | $56 | $61 | $66 | $73 |
| 8.0% | $46 | $50 | $53 | $58 | $63 |
| 8.5% | $42 | $44 | $47 | $51 | $55 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
🏦 Comparable Valuation
| Company | Mkt Cap ($B) | P/E | EV/EBITDA | Div Yield | FCF Yield |
|---|---|---|---|---|---|
| XOM (ExxonMobil) | $480B | 12.5x | 7.8x | 3.4% | 5.8% |
| CVX (Chevron) | $270B | 13.2x | 7.5x | 3.9% | 5.5% |
| SHEL (Shell) | $210B | 10.8x | 6.8x | 3.7% | 6.2% |
| TTE (TotalEnergies) | $155B | 8.5x | 5.8x | 4.6% | 7.1% |
| EQNR (Equinor) | $75B | 9.0x | 5.5x | 4.2% | 8.0% |
| BP (current) | $121B | N/M | 5.2x | 4.3% | 9.4% |
💰 Dividend / Distribution Analysis
| Metric | Value |
|---|---|
| Annual DPS | $1.980 |
| Current Yield | 4.28% |
| Consecutive Growth Years | 0 |
| 1-yr DPS CAGR | +0.0% |
| 3-yr DPS CAGR | +-3.0% |
| 5-yr DPS CAGR | N/A |
| 10-yr DPS CAGR | — |
| Payout Ratio (DPS/EPS) | 42.0% |
| FCF Payout Ratio | 45.7% |
| Sustainability Verdict | Moderate — Watch |
BP's dividend yield of ~4.3% is in line with European oil majors. The payout ratio of ~42% on TTM EPS and ~46% on FCF is moderately covered. However, BP's dividend history includes a 60% cut in 2020 and a 12.5% reduction in Q4 2024. While sustainable at normalized commodity prices, another prolonged downturn could force further cuts.
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2021 | $4.26 | — | — | — | Actual |
| 2022 | $10.58 | — | — | — | Actual |
| 2023 | $5.83 | — | — | — | Actual |
| 2024 | $6.78 | — | — | — | Actual |
| 2025 | $4.72 | — | — | — | Actual |
| 2026 | $2.50 | $4.12 | $5.50 | 15 | Estimate |
| 2027 | $2.80 | $4.50 | $6.00 | 12 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2021 | $164.3B | — | — | — | Actual |
| 2022 | $246.3B | — | — | — | Actual |
| 2023 | $200.9B | — | — | — | Actual |
| 2024 | $202.8B | — | — | — | Actual |
| 2025 | $189.0B | — | — | — | Actual |
| 2026 | $175.0B | $195.0B | $215.0B | 12 | Estimate |
| 2027 | $170.0B | $190.0B | $210.0B | 10 | Estimate |
(c) Individual Analyst Price Targets
Consensus: Avg $50.28 | Range $31–$57
| Analyst | Firm | Rating | PT | Upside |
|---|---|---|---|---|
| BNP Paribas | Exane BNP | Outperform | $57 | +23.2% |
| M. Rats | Morgan Stanley | Overweight | $49 | +5.9% |
| K. Fustier | HSBC | Hold | $45 | -2.7% |
| Wells Fargo | Wells Fargo | Equal Weight | $37 | -20.0% |
| TD Cowen | TD Cowen | Hold | $35 | -24.3% |
| Melius | Melius | Sell | $31 | -33.0% |
💡 Investment Thesis
Thesis: BP trades at roughly fair value on our exit-multiple DCF. Base case IV of ~$47 is near the current price ($46.25) and analyst PT ($50), suggesting modest upside potential with balanced risk/reward.
Bull Case: Sustained Brent above $80/bbl (geopolitical premium from Iran tensions) drives FCF to $14B+ and re-rates exit multiple toward 7x. Upside 50%+. Q1 2026 results (April 28) should show exceptional trading.
Bear Case: If Brent falls to $50-60, FCF compresses below $10B, forcing deeper cuts. At 5.5x exit, bear IV ~$31 — 33% downside. The 2024 dividend cut remains a credibility overhang.
Key Catalyst: Q1 2026 earnings (April 28) — BP flagged "exceptional" oil trading. Sustained high Brent de-risks the dividend and could trigger buyback resumption.
👔 Management Quality & Culture
CEO: Not identified
Net Insider Buys (12m)
-341,159 shares
Incentive Alignment
⚠️ Moderate
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
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: Hold — BP p.l.c. (BP)
Current price: $46.25 | Analyst Avg PT: $50.28
$34
🔴 Bear
$47
📊 Base
$64
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$43 | Begin position |
| Tier 2 — Add | ≤$40 | Add on weakness |
| Tier 3 — Full | ≤$32 | Full allocation |
| Sell Alert | ≥$55 | 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. At $46.25, the shares sit in a reasonable range relative to the base-case value of $47. Add only on weakness toward the entry tiers below.
🔧 Model Notes & Calibration
| Assumption | Rationale / Notes |
|---|---|
| Terminal Value: Exit Multiple | Uses EV/EBITDA exit multiple (5.5x–7.0x) instead of perpetuity growth. Perpetuity growth produces unrealistic ~25x terminal multiples for oil majors. Exit multiples anchor to observable market trading ranges (BP currently at 5.2x, XOM/CVX at 7-8x, European peers at 5.5-7x). |
| FCF Base Correction: $12B (not $30B) | The prior model used $30B FCF base, which was actually operating cash flow ($33.9B). BP's capex runs $16-22B/year, making actual FCF only $10-18B. We use $12B as normalized FCF (mid-cycle, post-capex). This is the single largest correction — it alone reduced base IV from $374 to realistic levels. |
| Share Count: 2,607.6M (not 1,906M) | Corrected ADR-equivalent share count from companiesmarketcap.com (2,607.6M). The prior model used 1,905.7M (stale or London-only). The 15,700.88M figure likely confused London ordinary shares with ADR units (1 ADR = 6 ordinary shares). |
| WACC at 6.54% (CAPM) | Ke=7.71% (Rf=4.3% + 0.62×5.5%), Kd=3.12%, We=68.9%, Wd=31.1%. Bear +1.5% (8.04%), Bull -0.5% (6.04%). |
| Prior Model Fix (Resolved) | Three critical errors inflated base IV to $374.78: (1) Perpetuity growth → ~25x TV multiplier; (2) $30B FCF was operating CF not FCF; (3) Wrong share count. Corrected model uses exit multiples, $12B FCF, and 2,608M shares, producing base IV ~$47. |
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