BP's (LON: BP.) London-listed shares were upgraded to Buy from Neutral by Citi analyst Alastair Syme in a note to clients on Tuesday.
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Syme, who has a 540p price target on the oil and gas company's shares, said the market rotation into energy stocks still has room to run, and energy equities tend to perform well in an earnings recession, which is the firm's base case for 2023.
BP's London-listed shares are up over 43% this year as the company, like other energy stocks, has benefitted from the surge in oil and gas prices as a result of inflation and the Russian invasion of Ukraine.
The analyst added that he thinks BP's underlying growth and favourable valuation give it the potential to differentiate.
Following BP's earnings release earlier this month, Wells Fargo analyst Roger Read upgraded the stock to Equal Weight from Underweight, raising the price target on the company's NYSE-listed shares to $36 from $31.
Read told investors in a research memo that he has increased confidence in the company's Gas & LCE segment investments paying off into 2024, while he believes the oil and gas giant delivered an “impressive” Q3 with another quarter of “exceptional” gas trading.
Elsewhere, Piper Sandler raised its price target on BP to $40 from $37 post Q3 earnings, maintaining an Overweight rating on the shares. The firm said BP's Q3 results were incrementally bullish for the integrated oil 2023 macro outlook.
BP closed Tuesday's session up 6.5%, while it has gained a further 1.5% so far on Wednesday.