BP PLC took a fresh hit to broker targets after pulling the plug on share buybacks to prioritise debt reduction, with UBS trimming its 12-month price target to 455p and RBC arguing the reset was inevitable but leaves better value elsewhere in the sector.
UBS kept a 'Neutral' stance, calling the decision to suspend repurchases “a wise one” and “a necessary step” to shore up the balance sheet, but warned it could take time for the market to warm to the story given BP is still trading on valuation multiples “at a premium to peers” and with net debt “likely to rise before it falls.” The bank also flagged that, with distributions now lower, growth becomes the key test.
On the numbers, UBS said fourth-quarter operating earnings of $4.4bn landed in line, while underlying cash flow from operations beat its forecasts, helped by slightly lower cash tax and higher dividends from associates. Guidance pointed to broadly flat production year-on-year and capex of $13–13.5bn for 2026, while management offered no timing on a buyback return and stressed it would not be automatic even at BP’s $14–18bn net debt target.
RBC, which rates BP 'Sector Perform' with a 500p target, described the move as BP “sacrificing short-term share price momentum” to make “the right long-term decision” as it incorporates a broader liability stack and puts debt reduction at the centre of its 2026–27 agenda.
The Canadian bank said that backdrop makes the equity case more sensitive to the crude price and, with a lower dividend yield than some peers, it prefers risk-reward elsewhere while investors watch for delivery on asset sales and balance-sheet progress.