RBC keeps a positive view on BP, though now with an ‘outperform’ rating and an unchanged 625p target price (current price: 566p).
“We remain constructive on BP for its medium term growth profile and improving cash flow framework. However, the shares have performed well versus the sector in recent months, and we see less valuation upside now,” RBC analyst Biraj Borkhataria said in a note.
Borkhataria added: “We think BP’s investment case over the medium term remains compelling, as upstream production volumes grow by 20% over 2018-22E, BP continues on its downstream growth strategy, and Macondo charges slowly reduce leaving BP with an improving financial framework.
“We see upside to shareholder returns provided BP can deliver on its asset sales programme over 2019-20, with debt reduction being the near term priority.
“We see these attractions as more recognised by the market, with BP outperforming all of its super-major peers in recent months.”