It's been a long time coming but oil titan BP's (LON:BP.) blood looks like it's circulating properly again.
Scribes at Barclays have taken a look at the oiler and the wider market today and reckons with the black gold forward curve for 2017 now above US$50 a barrel, expects investor confidence to grow in the company's ability to return to cash neutrality after both capex and dividends over the coming 12 months.
It is the bank's top pick in the sector.
It reckons BP's portfolio is now "simpler" and operations "more efficient" across both the upstream and downstream businesses.
Lydia Rainforth, an analyst, said: "BP's aim is to add 800kboe/d of production by 2020 relative to a 2015 base, but 500kboe/d of capacity should be in place by the end of 2017 - just 15 months away.
"This improving financial and operational performance comes at a point when the share price is offering a yield of 6.5% and over 30% potential upside to our 600p/sh price target.
"As such we see a material opportunity for the share price to continue to re-rate."
The bank rates the stock as 'overweight'.
From oil to other commodities and Deutsche bank looks at the European miners today, suggesting they are “rockin’, but not yet rollin".
Up 74% in the year to date, there is still further for the diggers to go, Deutsche’s analysts reckon.
It has upgraded its price forecasts for stocks by an average 6% in comprehensive assessment of the industry.
It bases its positive stance on the sector’s ability to generate free cash flow. The free cash flow yield will be a solid 8% this year, rising to 13% next.
“The outlook for commodity demand remains fragile for 2017 but the miners’ self-help efforts continue, and should drive improving free cash flow regardless,” Deutsche said in a note clients.
It is a ‘buyer’ of Rio Tinto PLC (RIO), Ferrexpo (LON:FXPO), Vedanta (LON:VED) and Acacia (LON:ACA) and has ‘sells’ on Fresnillo PLC (LON:FRES) and Lonmin (LON:LMI).
In the same note it resumed coverage of Anglo American PLC (LON:AAL) with a hold recommendation and £9.40 price target.
Also in brokerland today, RBC Capital Markets turns the tap on water group Severn Trent PLC (LON:SVT), and downgrades the stock on valuation grounds but lifts the target price to 2300p, from 2200p previously.
"We believe SVT will continue to be one of the better-held UK water stocks y investors. Its management presents SVT’s investment case strongly and largely receives a positive feedback from those who have met them."
In the banks, HSBC looks at its fellow RBS (LON:RBS) and downgrades to 'reduce' from 'hold' targeting 160p each.