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BP Trades at a Discount: Is Now the Right Time to Buy the Stock?
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Key Takeaways
BP trades at 3.27x EV/EBITDA, below the industry's 6.61x and peers XOM and CVX.
WTI is above $100 on Middle East tensions; EIA sees $85.68 this year vs $65.40 last.
BP aims to cut its corporate hybrid stack by $4B by next year-end and has achieved 70% of cost cuts.
BP plc (BP - Free Report) is trading at a trailing 12-month EV/EBITDA multiple of 3.27x, which is lower than the broader industry average of 6.61x. Exxon Mobil Corporation (XOM - Free Report) and Chevron Corporation (CVX - Free Report) , two other integrated energy majors, are valued higher at 10.03x and 9.66x, respectively.
Image Source: Zacks Investment Research
Should investors bet on the British energy giant right away, given it is cheap and oil is now in their glorious days? To conclude on this, let’s first analyze the current crude pricing environment and BP’s business fundamentals.
Robust Oil Prices, Key Discoveries to Fuel BP’s Upstream
The price of West Texas Intermediate (“WTI”) crude is trading around $100-per-barrel mark. The high price is being backed by ongoing tensions in the Middle East. The U.S. Energy Information Administration (“EIA”) in its latest short-term energy outlook projected WTI at $85.68 per barrel this year, higher than $65.40 last year. A highly favorable pricing environment for the commodity is likely to continue supporting BP's exploration and production activities, which derive a significant proportion of its earnings, similar to ExxonMobil and Chevron.
Image Source: The U.S. Energy Information Administration
The British energy major’s production outlook seems bright, thanks to major discoveries. On its latest earnings call, BP mentioned that since the beginning of 2025, it has made 14 discoveries. BP said Bumerangue appears to be a very large oil discovery, estimated at around 8 billion barrels in place, though further appraisal work is needed to determine how much can actually be extracted and commercialized.
BP’s to Reduce Financial Burden, Cost Reduction Targets
On its first-quarter 2026 earnings call, BP mentioned its plan to slash its corporate hybrid stack, special debt-like securities with both debt and equity characteristics, by more than $4 billion by next year-end. This should reduce BP’s interest costs and will likely free up future cash flows.
The integrated energy major’s cost-cutting measures are also worth mentioning. The company boasted that it has already achieved roughly 70% of its cost-cutting goal.
Should Investors Bet on the Stock?
BP’s price chart indicates strong investor interest in the stock. Over the past year, the stock has jumped 46.6%, outpacing the industry’s 41.1% growth, as well as XOM’s 39.6% and CVX’s 30.8% increase.
One-Year Price Chart
Image Source: Zacks Investment Research
Considering all the positive developments, it would be ideal for investors to bet on BP right away. Currently, the British energy giant sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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BP Trades at a Discount: Is Now the Right Time to Buy the Stock?
Key Takeaways
BP plc (BP - Free Report) is trading at a trailing 12-month EV/EBITDA multiple of 3.27x, which is lower than the broader industry average of 6.61x. Exxon Mobil Corporation (XOM - Free Report) and Chevron Corporation (CVX - Free Report) , two other integrated energy majors, are valued higher at 10.03x and 9.66x, respectively.
Should investors bet on the British energy giant right away, given it is cheap and oil is now in their glorious days? To conclude on this, let’s first analyze the current crude pricing environment and BP’s business fundamentals.
Robust Oil Prices, Key Discoveries to Fuel BP’s Upstream
The price of West Texas Intermediate (“WTI”) crude is trading around $100-per-barrel mark. The high price is being backed by ongoing tensions in the Middle East. The U.S. Energy Information Administration (“EIA”) in its latest short-term energy outlook projected WTI at $85.68 per barrel this year, higher than $65.40 last year. A highly favorable pricing environment for the commodity is likely to continue supporting BP's exploration and production activities, which derive a significant proportion of its earnings, similar to ExxonMobil and Chevron.
The British energy major’s production outlook seems bright, thanks to major discoveries. On its latest earnings call, BP mentioned that since the beginning of 2025, it has made 14 discoveries. BP said Bumerangue appears to be a very large oil discovery, estimated at around 8 billion barrels in place, though further appraisal work is needed to determine how much can actually be extracted and commercialized.
BP’s to Reduce Financial Burden, Cost Reduction Targets
On its first-quarter 2026 earnings call, BP mentioned its plan to slash its corporate hybrid stack, special debt-like securities with both debt and equity characteristics, by more than $4 billion by next year-end. This should reduce BP’s interest costs and will likely free up future cash flows.
The integrated energy major’s cost-cutting measures are also worth mentioning. The company boasted that it has already achieved roughly 70% of its cost-cutting goal.
Should Investors Bet on the Stock?
BP’s price chart indicates strong investor interest in the stock. Over the past year, the stock has jumped 46.6%, outpacing the industry’s 41.1% growth, as well as XOM’s 39.6% and CVX’s 30.8% increase.
One-Year Price Chart
Considering all the positive developments, it would be ideal for investors to bet on BP right away. Currently, the British energy giant sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.