BP Stock Today: Bank of America Downgrade, $750m Buyback and Hydrogen U‑Turn

BP stock is ending the first week of December in a strange but familiar place: cash is pouring out to shareholders, the share price is recovering, analysts are split, and the long‑term energy transition story is getting messier.

As of the close on 5 December 2025, BP’s New York–listed ADRs (NYSE: BP) traded around $35.8 per share, while the London‑listed stock (LSE: BP.) changed hands at about 453p, putting the UK shares up roughly 18% over the past year. ^[1] TradingView estimates BP’s dividend yield at about 5.4%, cementing its status as a high‑income name in the FTSE 100. ^[2]

Yet on 6 December, Bank of America flipped from “neutral” to “underperform” (Sell) on BP, arguing that weaker oil price expectations and a big asset‑sale programme could drag on earnings and free cash flow relative to rivals like Shell and TotalEnergies. ^[3] At the same time, BP is in the middle of another $750 million share buyback, has just delivered a solid third‑quarter earnings beat, and continues to pivot its strategy back toward oil and gas after a short‑lived attempt to be a green‑energy poster child. ^[4]

Here’s what’s driving BP stock right now — and what Wall Street expects for 2026 and beyond.

BP stock price and performance in December 2025

On the NYSE, BP closed at $35.83 on 5 December, down about 3.8% on the day but slightly up in after‑hours trading. On the LSE, the stock recently traded at 452.85p, down 2.6% over the previous 24 hours but up just over 18% year‑on‑year. ^[5]

UK‑based coverage notes that BP shares have climbed roughly 20–30% over the past six months, recovering from earlier underperformance and trading near 52‑week highs. TechStock²+1 That rebound has been helped by:

Improving operational performance and project delivery
A steady stream of quarterly buybacks
A resilient dividend currently set at 8.32 US cents per share per quarter on the ordinary share. ^[6]

From an income perspective, the combination of a 5%+ cash yield and ongoing share repurchases means BP is returning a high single‑digit to low double‑digit percentage of its market value to shareholders each year. ^[7]

Fresh pressure: Bank of America downgrades BP to “underperform”

The biggest new headline for BP stock this weekend is the Bank of America downgrade.

In a note highlighted by both MarketBeat and TipRanks, analyst Christopher Kuplent cut BP from “neutral” to “underperform” (Sell) and lowered his price target on the London shares from 440p to 375p. ^[8] His logic boils down to three main points:

Lower oil price forecast
- Bank of America has trimmed its Brent crude forecast for 2026 from $70 to $60 per barrel, prompting a more than 20% cut to BP’s 2026 earnings estimate, leaving it more than 5% below the Street consensus. ^[9]
Asset disposals dilute cash‑flow quality
- BP plans to sell around $20 billion of assets between 2025 and 2027. Kuplent argues this will dilute the quality and durability of free cash flow, leaving a shorter‑life, less attractive portfolio. ^[10]
Relative valuation vs peers
- On Bank of America’s numbers, BP’s free cash flow yield and growth profile look less compelling than those of better‑funded competitors like Shell and TotalEnergies. The brokerage points to BP’s high headline P/E ratio (over 60x on some IFRS measures) and sees limited room for a re‑rating. ^[11]

Despite the downgrade, MarketBeat’s data still shows a mixed analyst picture: roughly two “Strong Buy”, seven “Buy”, nine “Hold” and two “Sell” ratings, with a consensus “Hold” and an average 12‑month target price of about $43 for the US share — implying around 20% upside from current levels. ^[12]

TipRanks also notes that insider sentiment is positive, with more insiders buying than selling over the past quarter — hardly a picture of management bailing out. ^[13]

Buybacks and dividends: the bullish counter‑narrative

Against the new Sell call, BP has a simple message: “We’re paying you a lot of cash.”

Third‑quarter 2025 results

For the third quarter of 2025, BP reported underlying replacement cost profit of about $2.21 billion, beating analyst expectations of roughly $2.02 billion despite lower oil prices. ^[14] Key points:

Operating cash flow: around $7.8 billion in Q3, ahead of forecasts. ^[15]
Dividend: maintained at 8.32 US cents per ordinary share, up from 8.0 cents a year earlier. ^[16]
Buybacks: BP confirmed it would continue $750 million per quarter of share repurchases. ^[17]

Analysts at TipRanks described Q3 as BP getting its “mojo back”, while UK commentators highlighted that the company is on track to return almost $9.5 billion to shareholders in 2025 via dividends and buybacks. ^[18]

New $750m buyback running into 2026

On 4 November 2025, BP formally launched another share buyback programme of around $750 million, scheduled to run until 6 February 2026. ^[19]

SEC filings show that throughout November, BP has been repurchasing roughly 1.5 million ordinary shares per day on the London Stock Exchange and Cboe (UK), at volume‑weighted average prices in the 450–470p range. ^[20]

By 28 November 2025, BP:

Held about 838 million ordinary shares in treasury,
Had roughly 15.65 billion ordinary shares in issue, plus 12.7 million preference shares,
Reported total voting rights of 15.66 billion. ^[21]

Third‑party analysis of these disclosures suggests BP’s share count is down around 6% year‑on‑year, creating a 5–6% “buyback yield” on top of the cash dividend. TechStock²+1

For long‑term shareholders, this matters: if the underlying business even just treads water, a steadily shrinking share count mechanically boosts earnings per share and cash flow per share.

Strategy reset: more oil and gas, leaner transition spending

Under CEO Murray Auchincloss, 2025 has been the year of “reset BP”.

At a February capital‑markets presentation, BP outlined a new plan that:

Increases oil & gas investment to around $10 billion per year through 2027,
Cuts “transition” capex (biofuels, biogas, EV charging, renewables) to about $1.5–2 billion per year, more than $5 billion lower than earlier guidance,
Trims total capital expenditure to $13–15 billion per year through 2027,
Targets $20 billion of asset disposals by 2027,
Aims to cut net debt to $14–18 billion (from around $26 billion),
Commits to returning 30–40% of operating cash flow to shareholders via dividends and buybacks, with the dividend expected to grow at at least 4% annually, subject to board approval. TechStock²+2Reuters+2

Auchincloss has been explicit: BP is pivoting back to hydrocarbons, arguing that the energy transition is unfolding more slowly and unevenly than previously assumed in 2020–2021. ^[22]

Not everyone is cheering:

RBC’s Biraj Borkhataria calls the move strategically sensible but notes that BP’s near‑term shareholder returns lag peers, supporting a Neutral/Hold stance. TechStock²+1
Some investors like the tighter focus on high‑margin oil and gas and predictable cash returns. Others worry about reputational and ESG risk as BP rolls back some climate ambitions. TechStock²+1

Hydrogen U‑turn: H2Teesside scrapped in favour of an AI data centre

One of the most symbolic decisions of late 2025 is BP’s choice to abandon its planned H2Teesside hydrogen and carbon‑capture project in north‑east England.

According to coverage in the Financial Times and Zacks/Nasdaq:

H2Teesside was supposed to be a major “blue hydrogen” facility using natural gas with carbon capture, once flagged as potentially supplying around 20% of the UK’s 2030 hydrogen target. ^[23]
The project has been shelved after:
- The closure of a nearby Sabic chemicals site, which had been seen as a key off‑taker,
- Rising projected costs and weaker demand for low‑carbon hydrogen,
- The UK government’s decision to designate the area as an “AI growth zone”, with plans for what could become one of Europe’s largest data centres, roughly 500,000 square metres in size. ^[24]

BP says it remains committed to Teesside through a gas‑fired power station with carbon capture and associated infrastructure, but shelving H2Teesside is widely seen as a setback for its UK hydrogen ambitions and further evidence that the company will pursue a more selective, capital‑light transition portfolio. ^[25]

Labour and ESG flashpoints: UK forecourt staff lose paid breaks

BP’s ESG narrative is also under scrutiny after an exclusive report in The Guardian this week.

From February 2026, BP plans to scrap paid rest breaks and most bank‑holiday premium pay for around 5,400 workers at its 310 company‑run petrol forecourts in the UK. ^[26] The changes are intended to offset the cost of increasing hourly pay in line with the Living Wage Foundation rate, which will rise from £12.60 to £13.45 (a 6.7% increase). ^[27]

Critics — including staff and trade‑union voices — argue that:

The loss of paid breaks and overtime premia could cut overall take‑home pay by more than 6%, partially negating the headline wage rise,
The move risks being presented as a benefit while quietly reducing total compensation,
Some employees may feel pressured into accepting contractual changes without fully understanding their rights. ^[28]

From a purely financial perspective, BP’s UK retail forecourts are a small slice of group profits, but incidents like this feed into ESG scores, brand perception and employee relations — all of which influence how some institutional investors value the stock.

Oil price backdrop: mid‑$60 Brent, lower forecasts ahead

BP’s fate is still tightly tied to the oil price, and the macro backdrop is shifting.

Brent crude is currently trading around $63–64 per barrel, with futures data showing a close near $63.75 on 5 December 2025. ^[29]
Over the past year, Brent is down roughly 8–12%, leaving prices still comfortably profitable for major oil companies but well below the post‑Ukraine peaks. ^[30]

Forecasters are increasingly cautious:

The U.S. Energy Information Administration (EIA) now projects Brent will average around $55 per barrel in 2026, with inventories rising and putting downward pressure on prices. ^[31]
Fitch Ratings recently revised down its oil price assumptions for 2025–2027, citing expectations that supply growth will outpace demand — one of the reasons Bank of America cited when cutting BP. ^[32]
J.P. Morgan’s research team has also trimmed its Brent forecasts, looking for around $66 in 2025 and $58 in 2026. ^[33]
A new report from Morningstar suggests global oil demand will peak near 2032, then decline modestly (~8%) by 2050, though the firm raised its mid‑cycle Brent assumption from $60 to $65, modestly boosting valuations for oil majors. ^[34]

Put together, the message is: today’s oil price is decent, but the long‑term ceiling may be lower than in past cycles. That’s exactly the sort of environment in which investors obsess over capital discipline, portfolio quality, tax regimes and buyback pace — all core parts of the BP story.

BP stock forecast 2026–2027: what analysts expect

US‑listed BP (NYSE: BP)

According to StockAnalysis.com, the nine analysts currently covering BP’s US stock have: ^[35]

A consensus rating of “Hold”,
An average 12‑month price target of $39.87, implying roughly 11% upside from the 5 December close,
A target range from $29 (about 19% downside) to $66 (more than 80% upside), underscoring just how wide the gap is between bulls and bears.

MarketBeat, which tracks a slightly broader analyst universe, reports:

Around 20 analysts with coverage,
A consensus target near $43.14, implying roughly 20% upside,
A rating mix of multiple Strong Buy/Buy, many Hold, and a couple of Sell calls — now including Bank of America’s downgrade. ^[36]

London‑listed BP (LSE: BP.)

On the London market, data from Stocksguide indicates: ^[37]

25 analysts covering BP,
An average target price of £4.75 vs a current price around £4.53, implying roughly 5% upside,
A high estimate of £5.57 (around 23% potential upside) and a low of £4.14, indicating possible single‑digit downside.

TradingView’s snapshot adds that BP: ^[38]

Has delivered 18.3% share‑price growth over the last year,
Offers a TTM dividend yield of about 5.4%,
Is scheduled to report full‑year 2025 earnings on 10 February 2026.

In earnings terms, StockAnalysis’ consensus sees EPS around $0.50 for both 2025 and 2026, after a very weak 2024, with only modest growth expected beyond that under current oil price assumptions. ^[39]

Activist pressure and UK policy risks

BP’s strategic “reset” did not happen in a vacuum.

In February 2025, Reuters reported that activist investor Elliott Management had taken a “significant” stake in BP, sending the shares up about 7% in a single day and raising expectations of board changes and sharper capital discipline. ^[40] Analysts suggested Elliott might push for:

A clearer split between legacy oil and transition businesses,
Faster asset sales and debt reduction,
Higher and more predictable shareholder returns. ^[41]

At the same time, BP faces a tougher UK fiscal and regulatory backdrop. Coverage summarised by TS2 and UK media highlights that the Labour government plans to: TechStock²

Ban new North Sea exploration licences,
Maintain a windfall tax regime that can push the effective tax rate on UK upstream profits to around 78%,
Allow mainly incremental “tie‑back” projects to existing infrastructure.

For BP, the message is clear: treat the UK North Sea as a mature cash‑harvesting basin under heavy tax pressure, and lean on other regions — such as the US Gulf of Mexico, US onshore gas (bpx energy), and international projects — for growth. TechStock²+2Reuters+2

Key risks and catalysts for BP stock into 2026

Sifting through company guidance and recent analysis, a few big swing factors stand out. Nasdaq+4TechStock²+4Reuters+4

Oil and gas prices
- Sustained sub‑$60 Brent would squeeze free cash flow and might force BP to slow buybacks or revisit its 4% dividend‑growth ambition.
- A spike driven by geopolitics or supply disruptions would do the opposite, super‑charging returns.
Execution on the “reset BP” plan
- BP has talked about growing annual free cash flow from roughly $8 billion to $14 billion by 2027, thanks to capex cuts, cost savings and portfolio “high‑grading”.
- Hitting those targets requires flawless project delivery, disciplined M&A and smooth asset sales.
Shareholder returns versus peers
- Investors will keep comparing BP’s total yield (dividend plus buybacks) and growth outlook against Shell, TotalEnergies, Exxon and Chevron.
- If BP’s overall payout lags, its valuation discount could persist even if operations run smoothly.
Policy, tax and ESG tensions
- UK windfall taxes, the North Sea exploration ban, hydrogen policy reversals, labour disputes at forecourts and pipeline incidents all feed into policy and ESG risk.
- A harsher regulatory stance, or a backlash against companies seen as rowing back on climate commitments, could weigh on BP’s multiple.
Operational events and safety record
- Recent issues like the Olympic Pipeline leak in Washington state — which has now been resolved — show how quickly operational problems can become environmental and reputational headaches, even if they are not financially material on their own. TechStock²+1

Bottom line: how BP stock looks on 7 December 2025

Put everything together and BP in December 2025 is a classic “show me” value‑plus‑income story:

The numbers: solid Q3 profits, a dividend yield above 5%, and a continuing buyback programme that could retire around 3–5% of the share count per year at current pacing. ^[42]
The strategy: a clear pivot back to oil and gas, with leaner but still meaningful low‑carbon investments, and a heavy emphasis on paying down debt and returning cash. TechStock²+2Financial Times+2
The narrative: divided. Bulls see an under‑valued cash machine with activist oversight and a credible turnaround. Bears worry that structurally lower oil prices, aggressive asset sales and policy headwinds will cap both free cash flow and the valuation multiple. ^[43]

Analyst consensus still implies modest double‑digit upside over the next 12 months, but the spread between the most bullish and most bearish targets is huge — from downside into the high‑$20s to upside into the mid‑$60s on the New York listing. ^[44]

For investors, BP stock now is essentially a bet on three things:

That oil prices don’t collapse,
That BP can deliver on its reset strategy without tripping over operational or political landmines,
That management and activists together can close at least part of the valuation gap to peers through steady buybacks and growing dividends.