UBS Holds Neutral on BP With 455p Target After Buy-back Suspension
UBS cut BP’s 12-month price target to 455p while retaining a Neutral rating, calling the decision to suspend share buy-backs a necessary step to shore up the balance sheet. The bank warned BP’s valuation remains at a premium to peers and net debt may rise before it falls, delaying a rerating.
1. BP Suspends Share Buy-backs to Prioritize Debt Reduction
BP announced it would halt its planned share buy-back program to focus on strengthening its balance sheet and reducing net debt. The move reflects broader industry caution as energy prices and capital allocation priorities shift.
2. UBS Cuts Price Target to 455p and Retains Neutral Stance
UBS analysts lowered BP’s 12-month price target from previous levels to 455p while maintaining a Neutral rating. The team described the buy-back suspension as a wise, necessary measure but noted it could weigh on near-term sentiment.
3. Premium Valuation and Debt Outlook Could Delay Rerating
UBS highlighted that BP continues to trade at valuation multiples above peer averages. With net debt expected to rise before it falls, the broker warned it may take time for the market to warm to BP’s updated capital strategy.