UBS reiterated its Buy rating on BP PLC (LSE:BP.) with a 675p price target, implying 29% upside from 522p, after valuing the group’s US shale business at $24.5 billion, or 117p per share.
The broker said BPX Energy is a higher-quality asset than the market recognises.
Production at BPX has risen 37% since 2023 while unit costs have fallen 8%, with output forecast to grow by more than 7% annually to above 650,000 barrels of oil equivalent per day by 2030, the Swiss bank's London-based analysts highlighted in a note.
UBS expects BPX earnings to increase from about $3.3 billion in 2025 to $6 billion by 2030. Post-tax free cash flow could reach $2.8 billion, equivalent to roughly a quarter of BP’s group total.
The Permian, Eagle Ford and Haynesville assets should also benefit from growing US gas demand linked to LNG exports, power generation and data centres, analysts added.
They meanwhile reckon improved disclosure and communication could help narrow BP’s conglomerate discount, adding that BPX is “too important for the equity story to be sold”.
