BP's Market Gains Outpace Its Industry: What it Means for Investors
BP also outpaced its energy peers, Exxon Mobil Corporation XOM, which has advanced 9%, and Chevron Corporation EQT, which has gained 5.8% over the same period.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for BP's 2025 revenues is pegged at $235 billion, suggesting a 20.6% year-over-year improvement.
BP has an impressive Value Score of A. This style score helps analyze the growth prospects of a company.
BP continues to be a prominent name in the energy sector, known for its strong record of consistent dividend payments. With a current dividend yield of 6.14%, BP stands tall among its rivals, outperforming ExxonMobil's 3.53% and Chevron's 4.61%. BP's current dividend yield is notably higher than that of the composite stocks belonging to the industry. The company remains committed to distributing 30-40% of its operating cash flow through dividends and buybacks.
Image Source: Zacks Investment Research
Based on short-term price targets offered by 14 analysts, the Zacks average price target is $36.01 per share. The average suggests a 15.1% upside from the last closing price.
Image Source: Zacks Investment Research
Is it worth paying for the integrated energy giant? Before reaching an investment conclusion, let us analyze BP's fundamentals and overall business environment.
The most compelling reason to consider BP as a favorable investment is its strong free cash flow growth outlook. BP projects an adjusted free cash flow compound annual growth rate (CAGR) of more than 20% from 2024 to 2027. This is anchored by its disciplined capital allocation and robust upstream operations.
With a high sensitivity to oil prices, estimated at $340 million in pre-tax earnings for every $1 per barrel increase in Brent, BP stands to benefit significantly if the commodity cycle turns favorable. The projected cash flow expansion provides a crucial buffer against market volatility and supports long-term shareholder returns.
Capital discipline has been a core pillar of BP's revised strategy. The company has reduced its 2025 capex guidance by $500 million to $14.5 billion. This move reflects both proactive cost management and sensitivity to current market volatility.
At the same time, BP is pursuing a structural cost reduction target of $4-$5 billion by the end of 2027, which equates to about 20% of its 2023 baseline operating costs. Such efficiency gains will not only support earnings resilience but also create financial headroom for reinvestment or increased distributions to shareholders.
BP is also executing effectively on its upstream growth projects, with tangible results in 2025. Three of the 10 major projects planned for the 2025-2027 period have already come online. These include the Cypre development in Trinidad, the Raven infills in Egypt and the GTA Phase 1 LNG project in Mauritania and Senegal.
Collectively, these assets are expected to contribute more than 50,000 barrels of oil equivalent per day (boe/d) in 2025, with a peak output of 100,000 boe/d. The projects are capital-efficient, often tied to existing infrastructure, and are already delivering incremental cash flow.
In parallel, BP's exploration efforts are yielding strong results, with six discoveries in first-quarter 2025. These include finds in the U.S. Gulf of America, Trinidad and Egypt, as well as a significant strike in Namibia through its Azule joint venture.
Additionally, BP secured new access in Iraq and India, both of which have strategic production potential. The Ginger project in Trinidad, for instance, has been sanctioned and is expected to add 50,000 boe/d by 2027. This combination of near-term execution and long-term resource development enhances BP's upstream pipeline and value proposition.
BP's portfolio composition reinforces its investment case. Around a quarter of its upstream production is based on production sharing agreements (PSAs), which are relatively insulated from short-term price swings. Moreover, its development costs remain competitive at approximately $10 per barrel, with unit production costs near $6 per barrel. This cost structure positions BP well to sustain operations profitably, even in a lower-price environment.
The company's divestment strategy is progressing well, with more than $1.5 billion in proceeds secured year to date. The sale of non-core assets such as the Gelsenkirchen refinery and regional mobility businesses reflects a focus on portfolio high-grading. BP has revised its 2025 divestment proceeds guidance to $3-4 billion, with much of it expected in the second half. This initiative will help streamline operations and unlock capital for more investments.
One of the primary risk factors is the significant volatility in macroeconomic conditions and commodity markets. The company explicitly states that recent global developments, such as the introduction of tariffs and related governmental responses, have contributed to heightened market instability.
This has resulted in growing concerns about a weaker economic outlook, which can lead to reduced demand for oil and gas products. Such fluctuations in market demand directly affect commodity prices, and BP acknowledges that these softened prices have emerged in anticipation of this economic uncertainty.
Hence, it is advisable to exercise caution with this Zacks Rank #3 (Hold) stock. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
BP p.l.c. (BP) : Free Stock Analysis Report
Exxon Mobil Corporation (XOM) : Free Stock Analysis Report
EQT Corporation (EQT) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
19 minutes ago
- Yahoo
‘Most humbling thing I've ever seen': Ford CEO sounds alarm on China's EV dominance — what that means for you
Ford CEO Jim Farley didn't mince words at the recent Aspen Ideas Festival, describing China's rapid rise in the electric vehicle (EV) market as the 'most humbling experience' of his career. "Their cost, their quality of their vehicles is far superior to what I see in the west." Farley said. Chinese automakers like BYD have pulled ahead with vertically integrated supply chains, efficient production and government support. They're pumping out reliable EVs at prices that make even budget-conscious U.S. models look expensive — including the new BYD Seagull, priced under $10,000 USD. "We are in a global competition with China, and it's not just EVs. And if we lose this, we do not have a future Ford," Farley said. I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 6 of the easiest ways you can catch up (and fast) Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan 'works every single time' to kill debt, get rich in America — and that 'anyone' can do it For U.S. consumers, this isn't just about bragging rights in the global auto race. It's about what you'll pay for your next vehicle. If Chinese EVs enter Western markets without tariffs, they could undercut competitors by tens of thousands of dollars — bringing huge savings to consumers but serious threats to U.S. auto industry jobs. In response, the U.S. government has already imposed steep tariffs on Chinese electric vehicles, which may shield domestic automakers for now but also delay price competition. Farley's warning comes as more and more Americans are looking to switch to EVs amid soaring gas prices and expanding charging infrastructure. But since Tesla, Ford and GM EVs often start in the $40,000-$60,000 range, many Americans are priced out. Read more: No millions? No problem. With as little as $10, here's of diversified assets usually only available to major players China's advantage? It controls much of the world's battery production and can bring new EVs to market in a fraction of the time compared to U.S. automakers. Ford is working on a next-gen affordable EV platform intended to match China's costs but says it won't arrive until 2027. Tesla is also aiming to launch a $25,000 'Model 2,' but timelines remain uncertain. Until then, the price gap persists. One other fact is that Apple and Google just "decided not to go into the car business," according to Farley. This has created significant barriers to the U.S. competing with the level of technological integration made available in Chinese vehicles. "They have far superior in-vehicle technology. Huawei and Xiaomi are in every car," Farley added. "You get in, you don't have to pair your phone. Automatically, your whole digital life is mirrored in the car." For now, U.S. car buyers won't see sub-$20,000 EVs on the lot — but pressure is mounting. Here's how to stay ahead: Watch for incentives: Federal EV tax credits can ease the price of U.S.-made electric cars. Consider used EVs: As more models hit the market, prices on pre-owned electric cars are dropping. Just make sure you double-check the battery warranty before buying used. Plan long-term: If you're planning to switch to electric in the next few years, competition and innovation may bring prices down — eventually. Ford and Farley are painfully aware that market dynamics are shifting. And for American drivers, the race to affordable EVs is on. This tiny hot Costco item has skyrocketed 74% in price in under 2 years — but now the retail giant is restricting purchases. Here's how to buy the coveted asset in bulk Robert Kiyosaki warns of a 'Greater Depression' coming to the US — with millions of Americans going poor. But he says these 2 'easy-money' assets will bring in 'great wealth'. How to get in now Rich, young Americans are ditching the stormy stock market — here are the alternative assets they're banking on instead Here are 5 'must have' items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you? Money doesn't have to be complicated — sign up for the free Moneywise newsletter for actionable finance tips and news you can use. This article provides information only and should not be construed as advice. It is provided without warranty of any kind. Sign in to access your portfolio
Yahoo
an hour ago
- Yahoo
Google DeepMind has grand ambitions to ‘cure all diseases' with AI. Now, it's gearing up for its first human trials
Alphabet's Isomorphic Labs is preparing to launch human trials of AI-designed drugs, its president, Colin Murdoch, told Fortune. Born from DeepMind's AlphaFold breakthrough, the company is pairing cutting-edge AI with pharma veterans to design medicines faster, cheaper, and more accurately. Alphabet's secretive drug discovery arm, Isomorphic Labs, is getting ready to start testing its AI-designed drugs in humans, Colin Murdoch, Isomorphic Labs president and Google DeepMind's chief business officer, told Fortune. 'There are people sitting in our office in King's Cross, London, working, and collaborating with AI to design drugs for cancer,' Murdoch said during an interview in Paris. 'That's happening right now.' After years in development, Murdoch says human clinical trials for Isomorphic's AI-assisted drugs are finally in sight. 'The next big milestone is actually going out to clinical trials, starting to put these things into human beings,' he said. 'We're staffing up now. We're getting very close.' The company, which was spun out of DeepMind in 2021, was born from one of DeepMind's most celebrated breakthroughs, AlphaFold, an AI system capable of predicting protein structures with a high level of accuracy. Interactions of AlphaFold progressed from being able to accurately predict individual protein structures to modeling how proteins interact with other molecules like DNA and drugs. These leaps made it far more useful for drug discovery, helping researchers design medicines faster and more precisely, turning the tool into a launchpad for a much larger ambition. 'This was the inspiration for Isomorphic Labs,' Murdoch said of AlphaFold. 'It really demonstrates that we could do something very foundational in AI that could help unlock drug discovery.' In 2024, the same year it released AlphaFold 3, Isomorphic signed major research collaborations with pharma companies Novartis and Eli Lilly. A year later, in April 2025, Isomorphic Labs raised $600 million in its first-ever external funding round, led by Thrive Capital. The deals are part of Isomorphic's plan to build a 'world-class drug design engine,' a system that combines machine learning researchers with pharma veterans to design new medicines faster, more cheaply, and with a higher chance of success. As part of the deals with major pharma players, Isomorphic supports existing drug programs, but it also designs its own internal drug candidates in areas such as oncology and immunology, with the aim of eventually licensing them out after early-stage trials. 'We identify an unmet need, and we start our own drug design programs. We develop those, put them into human clinical trials… we haven't got that yet, but we're making good progress,' he said. Today, pharma companies often spend millions attempting to bring a single drug to market, sometimes with just a 10% chance of success once trials begin. Murdoch believes Isomorphic's tech could radically improve those odds. 'We're trying to do all these things: speed them up, reduce the cost, but also really improve the chance that we can be successful,' he says. He wants to harness AlphaFold's technology to get to a point where researchers have 100% conviction that the drugs they are developing are going to work in human trials. 'One day we hope to be able to say — well, here's a disease, and then click a button and out pops the design for a drug to address that disease,' Murdoch said. 'All powered by these amazing AI tools.' This story was originally featured on
Yahoo
an hour ago
- Yahoo
Chart of the Week: Wall Street Has Claimed Bitcoin—Now What?
"Wall Street is coming for bitcoin." That phrase used to spark both hope and fear across crypto circles. Today, it's no longer a future threat or a bullish promise—it's just reality. The original premise of bitcoin (or crypto in general)—an asset that is censorship-resistant and doesn't answer to any traditional financial institution or government—is fading fast as Wall Street giants (as well as powerful political figures) continue to establish their strong foothold in the digital assets space. During the early years of the digital assets revolution, bitcoin was celebrated as uncorrelated and unapologetically anti-establishment. TradFi asset classes like S&P 500 would rise and fall—bitcoin didn't care. What bitcoin did care about were the flaws in the traditional financial system, which are still here to this day. A major example in BTC's history that's not-so-talked about anymore is the 2013 Cyprus banking crisis. The crisis, which occurred due to overexposure of banks to overleveraged local property companies and amid Europe's debt crisis, saw deposits above 100,000 euros get a substantial haircut. In fact, 47.5% of uninsured deposits were seized. Bitcoin's response was to move sharply upward to, for the first time in its history, cross the $1,000 threshold. After a prolonged bear market over the collapse of Mt. Gox, the idea of mass adoption grew, with Wall Street's entry into the sector seen as a stamp of validation for bitcoin as it meant more liquidity, mass adoption and price maturity. That changed everything. The price might have matured, as evidenced by waning volatility. But let's face it—bitcoin is now just another macro-driven risk asset. "Bitcoin, once celebrated for its low correlation to mainstream financial assets, has increasingly exhibited sensitivity to the same variables that drive equity markets over short time frames," said NYDIC Research in a report. In fact, the correlation is now hovering near the higher end of the historical range, according to NYDIG's calculations. "Bitcoin's correlation with U.S. equities remained elevated through the end of the quarter, closing at 0.48, a level near the higher end of its historical range." Simply put, when there is blood on the street (Wall Street that is), bitcoin bleeds too. When Wall Street sneezes, bitcoin catches a cold. Even bitcoin's 'digital gold' moniker is under pressure. NYDIG notes that bitcoin's correlation to physical gold and the U.S. dollar is near zero. So much for the 'hedge' argument—at least for now. So why the shift? The answer is simple: to Wall Street, bitcoin is just another risk asset, not digital gold, which is synonymous with "safe haven." Investors are repricing everything from central bank policy whiplash to geopolitical tension—digital assets included. "This persistent correlation strength with U.S. equities can largely be attributed to a series of macroeconomic and geopolitical developments, the tariff turmoil and the rising number of global conflicts, which significantly influenced investor sentiment and asset repricing across markets," said NYDIG. And like it or not, this is here to stay—at least for a short to medium-term. As long as central bank policy, macro, and war-linked red headlines hit the tape, bitcoin will likely move in tandem with equities. "The current correlation regime may persist as long as global risk sentiment, central bank policy, and geopolitical flashpoints remain dominant market narratives," NYDIG's report said. For the maxis and long-term holders, the original vision hasn't changed. Bitcoin's limited supply, borderless access, and decentralized nature remain untouched. Just don't expect them to impact price action just yet. For now, the market sees bitcoin as just another stock ticker. Just balance your trade strategies accordingly. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
