Analysts Turn Bearish On BP Shares As Downgrades Mount

BP (LON: BP.) shares are facing mounting pressure as some major banks cut their ratings on the energy group following Tuesday’s update, which included weaker full-year profits and a suspension of its share buyback programme.

The shift in sentiment comes after the company reported underlying replacement cost profit of $7.5 billion for 2025, down from $8.9 billion a year earlier, alongside softer fourth-quarter earnings.

BP said it would pause buybacks to accelerate balance-sheet strengthening, a move that has unsettled investors already concerned about falling upstream realisations and lower refinery throughputs.

BP shares fell over 6% on Tuesday following the update.

BNP Paribas became the latest to turn cautious, with analyst Lucas Herrmann downgrading the stock to Neutral from Outperform with a $38.50 target.

HSBC took a harsher view, cutting BP to Reduce from Hold. Analyst Kim Fustier said the company is making sound strategic decisions, but argued that the benefits remain “years away.”

HSBC warned that the buyback halt leaves BP offering the lowest distribution yield in the sector, with limited visibility on medium-term growth and few near-term catalysts to support a re-rating.

Freedom Capital cut BP to Sell. Analyst Sergey Pigarev cited soft fourth-quarter performance and the suspension of share repurchases, warning that further oil market weakness in 2026 could weigh “materially” on earnings.

The broad set of downgrades highlights a growing consensus that BP’s is facing some stubborn headwinds. With shares already under pressure, analysts say the market may struggle to look past the near-term hurdles until earnings momentum stabilises.