BP PLC (LSE:BP.) has been upgraded to a 'buy' by US bank Citi, which sees oil and gas stocks as having further to run even though some US groups sit at all-time highs.
“History says energy equities usually perform well in an earnings recession,” the bank's analysts said noting that this is their base case for 2023.
While the best returns usually occur in the first year, which has now passed, outperformance typically continues until the earnings cycle turns, they added.
In Europe, that fact makes BP (and Repsol) key buys, the analysts said.
Shares in BP rose 5.7% to 484.4p with a tailwind from an oil price rally also helping.