Berenberg Bullish on BP Shares, Now Sees Better Prospects For Upstream Business

Berenberg upgraded BP (LON: BP.) shares to “Buy” from “Hold” in a note to clients last week, citing stronger second-quarter performance and improved medium- to long-term prospects for the oil major’s upstream business. 

Analyst Henry Tarr also lifted the firm’s price target for the stock 500 pence from 385 pence, pointing to “significantly stronger” Q2 results and recent positive exploration developments.

The broker said the upbeat earnings, coupled with exploration successes, have strengthened its outlook for BP’s production and reserve base over the coming years. 

The upgrade follows BP’s recent results, which outperformed expectations on both operational and financial metrics.

Adding to the bullish sentiment, TD Cowen increased its price target on BP to $37 from $34, while maintaining a “Hold” rating. 

The firm said earnings benefited from strong operations and trading that outperformed peers, but cautioned against extrapolating the strength too far given a softer first quarter.

BP shares have risen 7.6% in the past month, despite a dip in oil prices. The stock is up 6.9% year-to-date but remains down 2.4% over the past 12 months.

According to TradingView data, the consensus price target from 27 analysts stands at 444.9 pence, implying a potential 5.1% upside from current levels.

Berenberg’s target of 500 pence suggests the firm sees further room for gains, supported by what it views as a stronger upstream growth profile and a more favourable medium-term commodity environment.