RBC Capital Markets sees more than 30% upside in BP PLC (LSE:BP.) as the oil major’s improving balance sheet and supportive commodity backdrop begin to outweigh the noise around its boardroom upheaval.
The broker reiterated its Outperform rating, with a 700p price target, compared to a current price of around 540.5p.
“While the tabloid obsession with BP’s boardroom drama continues, the macro environment remains highly supportive for BP’s investment case, and we continue to see room for the shares to outperform peers,” RBC said in a note.
RBC said former chair Albert Manifold had become an unusual part of BP’s investment case, with many investors viewing him as an “agent of change”. Thomson, according to the broker, insisted BP’s strategy remains unchanged, centred on deleveraging and improving efficiency.
Governance concerns have not disappeared, the Canadian bank noted, saying investors will need “comfort around strategic consistency”, particularly after a period in which BP has seen repeated resets and management changes. But the broker’s core argument is that the numbers are now moving in BP’s favour.
