Proactive Investors - BP PLC's (LSE:LON:BP.) shares are worth almost double their current price, Barclays (LON:BARC) says, following the oil supermajor's latest capital markets update.
Oil and gas equity analysts at the bank said on Wednesday that they expect BP’s share price would represent fair value at 1000p, saying they expect a positive reaction to the company's capital markets event in Denver, of which today is the second day.
BP’s shares are currently trading at a price per share of 526.30p.
During the event, the FTSE 100-listed giant lifted its target for group earnings before interest, tax, depreciation and amortisation (EBITDA) for 2030 to a range of US$53 billion to US$58 billion.
The oil company revised its earnings target due to expecting better performance in its hydrocarbon business, which it now expects to deliver US$41 billion to US$44 billion by 2030.
Analysts emphasised the company’s commitment to “longevity” and growth in the upstream segment to the end of the decade and beyond.
BP now expects to grow oil & gas production through to 2025 and liquids to 2027, and to sustain that growth until 2030 and "well into the next decade".
In the UK, Prime Minister Rishi Sunak’s delay to the proposed ban on petrol cars is likely to shore up the market for oil beyond the slated 2030, when the ban was due to be introduced, to later in 2035.
“We continue to see material upside in the stock to 1000p per share,” Barclays’ analysts said of oil major BP.
“The message here is clear. This is not a business in decline instead having meaningful terminal value. In terms of resources bp disclosed it has 36bn or resources in the upstream, of which 7bn boe are proves and 18bn boe are included in the plan.”