Jefferies has cut its price target for BP PLC (LSE:BP.) by 20% as new chief executive Meg O’Neill approaches her first 100 days in the top job with a simplified management structure already in motion.
The American bank repeated a ‘hold’ rating on the oil major, but lowered its target to 520p from 650p, though notably that target still implies some 14% upside from BP’s 456p share price.
Thursday, 9 July, will mark 100 days since O’Neill took over as BP chief executive, with the same day also set to feature her first in-person sell-side analyst meeting in the role.
Jefferies said the focus will be on the business reorganisation announced in June and implemented from 1 July, alongside updated second-quarter estimates that now sit 6% below consensus.
The new structure divides BP into two reporting segments, Upstream and Downstream, replacing the former three-way split of production and operations, gas and low-carbon energy, and customers and products.
Gas and power trading will sit within Upstream, while oil and products trading will be reported in Downstream. Technology, including low-carbon activities, will be reported within other businesses and corporate.
“Focusing BP around two distinct segments is an important step in accelerating delivery. It will reduce complexity and strengthen execution,” O’Neill said when the changes were announced.
Jefferies said the reorganisation leaves BP with a seven-EVP management structure, one fewer than before, though it noted that the interim Downstream EVP role and interim head of M&A position still need to be made permanent.
The broker also highlighted the scale of turnover at the top of the company. Of the 11 people who held EVP leadership roles in 2020, Jefferies estimates only Gordon Birrell remains in place today.
Jefferies cut its 2026 earnings-per-share forecast by 4% to $0.90 and reduced its second-quarter EPS estimate by 13% to $0.24, reflecting lower Gulf of America production assumptions, weaker realised oil and gas prices, and a lower refining indicator margin.
Its second-quarter net debt estimate includes a $2.9 billion hybrid redemption and a $1.1 billion US Macondo outflow, while BP continues to target net debt of $14 billion to $18 billion by the end of 2027.
BP is an integrated energy company with upstream oil and gas, refining, trading, fuels, convenience, aviation, Castrol, biofuels, hydrogen, renewable natural gas, carbon capture and low-carbon technology businesses.
