RBC Sees BP Re-rating Potential as Balance Sheet Repair Nears Completion

04:02 AM EST, 11/09/2026 (MT Newswires) -- RBC Capital Markets affirmed its investment opinion on BP (BP.L), highlighting a re-rating opportunity for the oil and gas major amid expectations of the completion of its balance sheet repair by mid-2027. "The combination of improving operational performance, a supportive macro environment and the potential for greater strategic and financial clarity leave us with a positive view on BP. This is a rebuilding trust story and the upcoming CMD will be an opportunity to set out strategic priorities beyond de-leveraging. We maintain our Outperform rating and 720p Price Target. BP remains on RBC's Global Energy Best Ideas list," analysts said Monday ahead of BP's capital markets day scheduled for Dec. 15. The research firm believes the company needs to present a "balanced" investment case, including upstream growth, cost cuts, downstream optimization and "competitive" capital returns. RBC expects BP to initiate "modest" share buybacks, beginning with $1.5 billion per quarter in the second half of 2027, once debt obligations reach a "sufficiently conservative" target of $25 billion. "Given its relative valuation, the aim is to force investors to view it as a comparable investment case vs peers, rather than helping investors find reasons why it should trade at a discount," the note said. In terms of forecasts, RBC adjusted its multi-year production and earnings estimates upward, fueled primarily by stronger-than-expected BPX volumes. Consequently, analysts raised their group EPS estimates by 5% for full-year 2026, 4% for 2027, and 6% for 2028.