BP stock is upgraded to 'overweight' by JPMorgan

BP stock has lagged its rivals through two energy crises.

Integrated oil giant BP has lagged its closest rivals over the last three to five years, but now one leading Wall Street firm says it's time to buy the beleaguered company.

JPMorgan lifted its rating on BP (BP) (UK:BP) to overweight from neutral as it boosted its price target to 675 pence (about $54 for the American Depositary Receipt) from 550 pence.

Analysts led by Matthew Lofting gently characterized BP's recent tumultuous history as "chequered" but said the company's balance sheet improvement means the stock is "no longer a poison pill." They estimate that, by the end of 2027, BP's total financial obligations will have fallen by 50%, to take their gearing metrics back in line with European peers for the first time this decade.

"This drives significant improvement in the ratio of financial expenses/dividends, signaling potential for a debt-to-equity value transfer which sees BP return to distribution growth," the analysts said.

Analysts said BP is building a rationalized upstream pipeline capable of supporting volume growth on the order of about 3% per year between 2030 and 2035.

The same firm downgraded TotalEnergies (TTE) (FR:TTE) to neutral from overweight, noting the French company's highest direct Middle East asset exposure among European companies, as well as the possibility of windfall taxes.

-Steve Goldstein