SocGen upgrades BP to 'buy'

Analysts at Societe Generale upgraded their recommendation on stock of BP from 'hold' to 'buy', citing fading concerns regarding the Deepwater Horizon disaster.

In parallel, strong growth in volumes, earnings and a seven-fold rise in cash-flows had de-risked the oil major's 2021 cash-flow targets, they said, in turn raising "confidence in its capacity to grow shareholder distribution".

And there was still room for the roughly 6% sustainable dividend yield to grow, they said.

Furthermore, the shares were trading at an approximately 7% discount versus competitor Shell in terms of its EV/DACF multiple, according to SocGen.

"This is a high quality undervalued stock, hit by the oil price correction to $64/bbl, but whose portfolio has been reset for material free cash generation at $55/bbl."