RBC Adjusts Estimates for BP After 'Strong' Q2 Update
RBC Capital Markets revised its earnings projections for BP (BP.L) after the British oil and gas giant delivered a "strong" second-quarter trading update. "BP's trading update was better than what we had modeled across most indicators, with strong [realizations] in the upstream alongside higher refining margin capture than we had modeled. These divisions were supported also by strong oil trading results," the research firm said Tuesday. Accordingly, analysts raised their adjusted EBIT/replacement cost operating profit, or EBIT/RCOP, forecast to $9.6 billion from $8.7 billion and increased their adjusted net income estimate to $5.3 billion from $4.7 billion, noting their assumptions are 15% and 31% ahead of consensus, respectively. "We continue to see BP's net debt declining rapidly into 2H26 and expect BP to shoot through its net debt reduction target a year early, with our reported net debt forecast around $8bn by [year-end]. This should coincide with BP presenting a refined corporate plan and medium-term outlook, in our view," the note said. RBC rates the stock at outperform, with a price target of 7 pounds sterling.
RBC Capital Markets revised its earnings projections for BP (BP.L) after the British oil and gas giant delivered a "strong" second-quarter trading update. "BP's trading update was better than what we had modeled across most indicators, with strong [realizations] in the upstream alongside higher refining margin capture than we had modeled.
These divisions were supported also by strong oil trading results," the research firm said Tuesday.
Accordingly, analysts raised their adjusted EBIT/replacement cost operating profit, or EBIT/RCOP, forecast to $9.6 billion from $8.7 billion and increased their adjusted net income estimate to $5.3 billion from $4.7 billion, noting their assumptions are 15% and 31% ahead of consensus, respectively. "We continue to see BP's net debt declining rapidly into 2H26 and expect BP to shoot through its net debt reduction target a year early, with our reported net debt forecast around $8bn by [year-end].
This should coincide with BP presenting a refined corporate plan and medium-term outlook, in our view," the note said.
RBC rates the stock at outperform, with a price target of 7 pounds sterling.