BP PLC (LSE:BP.) has been added to Citi’s catalyst watch list as a “Top Call” ahead of a potential key Bumerangue update, with the broker arguing the market is not fully reflecting recent developments.
Citi noted BP has outperformed a basket of European integrated oil companies by 4.4% over the past six months. It said that equates to around $4 billion of additional equity value.
The broker described that relative move as modest given what it sees as a materially improved backdrop.
Citi pointed to two quarters of earnings that it said showed significant improvement versus key peers. It also highlighted a surprise win in a US LNG arbitration, which the broker suggested could be worth $3 billion to $4 billion on its own.
The American bank added that BP’s Castrol sale came in at the top end of market expectations.
The Citi note also referenced a new chairman and said the business appears to be undergoing change. Citi’s main focus was what it described as material exploration success in Brazil. It said this could be worth $15 billion to $20 billion on a “blue sky” basis.