RBC Capital Markets reiterated its Outperform rating on BP with a 700p price target, implying more than 30% upside from the current 540.5p. The broker said the oil major's improving balance sheet and supportive commodity backdrop outweigh boardroom upheaval concerns.
RBC Capital Markets sees BP shares rising more than 30%, citing an improving balance sheet and supportive commodity trading environment.
"While the tabloid obsession with BP's boardroom drama continues, the macro environment remains highly supportive for BP's investment case, and we continue to see room for the shares to outperform peers," RBC said in a note.
The Canadian bank set a 700p price target on BP, compared with the stock's current trading level of around 540.5p. RBC reiterated its Outperform rating on the London-listed oil major.
The bullish call comes as BP navigates boardroom upheaval following the departure of former chair Albert Manifold, whom RBC described as an "agent of change" in the eyes of many investors. Current chair Thomson has insisted the company's strategy remains unchanged, centered on deleveraging and improving efficiency.
Governance concerns have not disappeared, RBC noted, saying investors will need "comfort around strategic consistency" after a period of repeated resets and management changes. The broker's core argument, however, is that the numbers are now moving in BP's favor.
The supportive macro environment — including elevated oil prices and strong refining margins — provides a tailwind for BP's cash flow generation, enabling faster debt reduction. BP has been working to strengthen its balance sheet after a period of elevated leverage, with net debt declining in recent quarters. Brent crude has traded above $70 a barrel for much of this year, supporting cash flows across the sector.
RBC's view places it among the more bullish analysts covering BP. The stock has lagged some European oil peers this year, including Shell and TotalEnergies, as the boardroom turmoil created uncertainty around strategic direction. BP shares trade at a discount to its peer group on forward earnings, a gap RBC believes will narrow as the deleveraging story gains traction.
The 700p target implies a roughly 30% premium to the current share price, suggesting RBC sees limited downside risk from governance noise. Investors will watch for BP's next quarterly update for evidence that the deleveraging strategy is delivering measurable balance sheet improvement.
This article is for informational purposes only and does not constitute investment advice.
