BP p.l.c. provides carbon products and services. The company operates through Gas & Low Carbon Energy, Oil Production & Operations, and Customers & Products segments. It engages in the production of natural gas, and integrated gas and power; trading of gas; operation of onshore and offshore wind power, as well as hydrogen and carbon capture and storage facilities; trading and marketing of renewable and non-renewable power; and production of crude oil. In addition, the company involved in convenience and retail fuel, EV charging, Castrol lubricant, aviation, B2B, and midstream businesses; refining and oil trading; and bioenergy business. The company was founded in 1908 and is headquartered in London, the United Kingdom.

BP looks like a large and liquid energy business, but the fundamental picture is far from ideal for an aggressive valuation upgrade. Revenue and gross profit remain very large, and EBITDA and operating profit on a TTM basis look stronger than in most previous quarters, which supports the underlying resilience of the business. At the same time, returns on capital and assets remain weak: ROE, ROA, ROI, and return on tangible equity are noticeably below industry benchmarks, which limits the potential for re-rating. Margins also do not look convincing: gross margin, operating margin, and net profit margin are below the sector median, despite improvement versus earlier periods. The valuation multiples present a mixed picture: P/S and P/B look relatively moderate, but P/FCF is already slightly above the industry level, while an extremely high P/E points to earnings distortion and makes this metric of limited use in supporting a high valuation. The debt burden is not critical, but debt/equity is above the median, and long-term debt remains significant, which adds caution to the outlook. Liquidity is acceptable: the current ratio is around normal, cash on hand is high, but the quick ratio is below the desired level, so there is a buffer, but it does not look excessive. Dividend yield has declined compared with last year, reducing the stock’s appeal for income investors. The trend looks more stabilizing than accelerating: there is profit and cash flow, but the quality of earnings and capital efficiency do not show convincing improvement. Overall, this supports a moderately positive view of the company as a large defensive player in energy, but without grounds for a meaningful increase in the target valuation. For an investor, BP looks more like a story of stable cash flow and moderate value than a candidate for strong multiple expansion. Therefore, it is reasonable to maintain a cautious, slightly negative view on the target price, given the weak profitability and mixed earnings dynamics.

BP p.l.c.

BP remains a large and liquid energy player, but weak profitability, a high P/E ratio, and moderately elevated debt limit revaluation potential.

BP plc BP is set to report second-quarter 2026 results on Aug. 4, 2026.
In the last reported quarter, the British energy giant reported earnings of $1.24 per American Depositary Share (ADS) on a replacement-cost basis, excluding non-operating items. The figure beat the Zacks Consensus Estimate of 91 cents, thanks to increased upstream production, significantly higher realized refining margins and a strong oil trading contribution.
BP’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 22.98%. This is depicted in the graph below:
BP p.l.c. Price and EPS Surprise
BP’s Estimate Trend
The Zacks Consensus Estimate for second-quarter earnings is pegged at $1.98 per ADS, implying an improvement of 120% from the year-ago reported number. It has witnessed one upward estimate revision in the past seven days.
The Zacks Consensus Estimate for second-quarter revenues is currently pegged at $67.7 billion, indicating a 42% rise from the year-ago actuals.
Q2 Earnings Whispers for BP
Our proven model doesn’t predict an earnings beat for BP this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the chances of an earnings beat. That is not the case here.
The integrated energy major has an Earnings ESP of 0.00% and a Zacks Rank #3.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Factors to Note Ahead of BP’s Q2 Results
To have an idea of how oil prices behaved in the June quarter, let's analyze the commodity prices from the data provided by the U.S. Energy Information Administration (“EIA”). The average Cushing, OK, WTI spot prices for April, May and June of this year were $100.32 per barrel, $102.13 per barrel and $84.81 per barrel, respectively, per EIA data. Commodity prices were $63.54 per barrel, $62.17 per barrel and $68.17 per barrel, respectively, in April, May and June of 2025, according to the EIA.
A constructive oil-price backdrop due to the Iran war aided the company’s exploration and production businesses in the June quarter of this year. However, the company expects its sequential production to be lower because of seasonal maintenance activities across the Gulf of America.
Stocks to Consider
Here are some stocks that you may want to consider, as these have the right combination of elements to post an earnings beat this reporting cycle.
Occidental OXY currently has an Earnings ESP of +6.66% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
OXY is scheduled to release second-quarter earnings on Aug. 5. The Zacks Consensus Estimate for OXY’s earnings is pegged at $1.95 per share, implying a 400% increase from the prior-year reported figure.
Energy Transfer LP ET currently has an Earnings ESP of +5.88% and a Zacks Rank #3.
Energy Transfer is scheduled to release second-quarter earnings on Aug. 4. The Zacks Consensus Estimate for ET’s earnings is pegged at 38 cents per share, indicating an 18.8% improvement from the prior-year reported figure.
Devon Energy DVN currently has an Earnings ESP of +0.61% and a Zacks Rank #3.
DVN is scheduled to release second-quarter earnings on Aug. 4. The Zacks Consensus Estimate for DVN’s earnings is pegged at $1.30 per share, implying a 54.76% increase from the prior-year reported figure.
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Important Factors to Watch Ahead of BP's Q2 Earnings Release

ExxonMobil Holdings Corporation XOM is set to report second-quarter 2026 results on July 31, before the opening bell.
The Zacks Consensus Estimate for second-quarter earnings is pegged at $3.87 per share, implying a surge of almost 136% from the year-ago reported number. It has witnessed one downward estimate revision in the past seven days. The Zacks Consensus Estimate for second-quarter revenues is currently pegged at $95.8 billion, suggesting a roughly 18% rise from the year-ago actuals.
XOM beat the consensus estimate for earnings in each of the trailing four quarters, with the average surprise being 6.04%. This is depicted in the graph below:
Image Source: Zacks Investment Research
Q2 Earnings Whispers for XOM
Our proven model doesn’t predict an earnings beat for XOM this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the chances of an earnings beat. That isn’t the case here.
The leading integrated energy player has an Earnings ESP of -2.40%. XOM currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
XOM’s Factors to Note
In its latest 8-K SEC filings, XOM stated that it is likely to see a sequential improvement in the June quarter upstream earnings by $3.5 billion to $3.9 billion due to an increase in liquid prices.
To have an idea of how oil prices behaved in the June quarter, let's analyze the commodity prices from the data provided by the U.S. Energy Information Administration (“EIA”). The average Cushing, OK, WTI spot prices for April, May and June of this year were $100.32 per barrel, $102.13 per barrel and $84.81 per barrel, respectively, per EIA data. Commodity prices were $63.54 per barrel, $62.17 per barrel and $68.17 per barrel, respectively, in April, May and June of 2025, according to the EIA.
A constructive oil-price backdrop due to the Iran war aided the company’s exploration and production businesses in the June quarter of this year, similar to BP plc BP and Chevron Corporation CVX.
XOM added that stronger margins from its Energy Products segment are likely to have provided a $2.0 billion to $2.4 billion sequential benefit.
XOM’s Price Performance & Valuation
XOM's stock has jumped 37.2% over the past year, outperforming the industry’s 35.6% surge. BP has gained 28.4% over the same time frame, while Chevron has rallied 21%.
One-Year Price Chart
While XOM’s stock price has outperformed the industry, the company appears relatively overvalued. The company's current trailing 12-month enterprise value/earnings before interest, tax, depreciation and amortization (EV/EBITDA) is 10.23x, reflecting that it is trading at a premium compared with the industry average of 6.71x. Both BP and CVX are valued lower at 3.15x and 9.85x, respectively.
Investment Thesis of XOM
ExxonMobil has a massive footprint in the Permian, the most prolific oil and gas play in the United States, and offshore Guyana. In the Permian, the integrated giant has been employing lightweight proppant technology and hence is capable of boosting its well recoveries by up to as much as 20%.
According to the data from the Federal Reserve Bank of Dallas, the shut-in price for existing wells in the Midland, a sub-basin of the Permian, is $42 per barrel. For Delaware, another sub-basin, the Federal Reserve Bank of Dallas estimated the price at $34 per barrel.
With West Texas Intermediate (“WTI”) crude oil trading above the $80-per-barrel mark, significantly above the shut-in prices, it makes sense for XOM to continue production in the wells. Although the upstream business seems lucrative now, the high oil price is hurting the company’s refining operations, since the input costs have jumped. Also, with a significant proportion of earnings being generated from upstream activities, the company’s business is highly vulnerable to the volatility in commodity prices.
Last Word
Given the backdrop, it might not be wise for investors to bet on the integrated energy giant ahead of earnings because of its overvaluation. However, those who have already invested may hold on to the stock.
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ExxonMobil's Q2 Earnings on Deck: Should You Bet on the Stock?

ConocoPhillips COP, a leading U.S.-based exploration and production player, has announced that it has agreed to acquire a 42% stake in BP Energy Company of Kirkuk Limited (BP ECKL), a subsidiary of the British energy major BP plc BP. The subsidiary is involved in the redevelopment of four large oil fields with producing wells in the Kirkuk region of Iraq. Through this partnership, COP will support the ongoing redevelopment efforts for these oil fields. The announcement mentioned that the agreement is anticipated to be signed during Iraq’s Prime Minister al-Zaidi's visit to Washington, D.C., in the United States.
BP ECKL operates under the Development and Production Contract (DPC), which enables it to develop and produce oil from the prominent Baba and Avanah domes of the Kirkuk oil field. The DPC also covers the Bai Hassan, Jambur and Khabbaz oil fields, all of which are currently producing. These fields have an estimated initial gross recoverable resource surpassing 3 billion barrels of oil equivalent (boe), highlighting significant resource potential.
The companies intend to recover these reserves via rehabilitation and upgradation of existing field infrastructure, redevelopment activities and optimization of field operations to improve efficiency. The joint venture project at the giant Kirkuk oil field is estimated to cost around $25 billion.
In addition to raising output from the existing fields, the contract area has exploration potential, suggesting the region may contain untapped oil and gas resources that could be developed later, supporting long-term production growth. The deal is expected to close by the end of 2026, pending necessary regulatory approvals and customary closing conditions.
COP believes that the oil fields included in this project are high-quality assets capable of generating attractive returns. The company’s CEO noted that this redevelopment opportunity aligns with ConocoPhillips’ disciplined approach to capital allocation, while providing exposure to a high-quality, long-life and large asset base that can benefit the company. The project leverages an existing production base, making it capital-efficient, while reducing execution risk and enabling it to generate returns faster. The deal will expand the company’s international portfolio of assets and is expected to boost its total production in the future. The company noted that the redevelopment of these large, established oilfields meets its low cost of supply criteria, while offering exploration upside.
Zacks Rank & Key Picks
ConocoPhillips and BP currently carry a Zacks Rank #4 (Sell).
Some better-ranked stocks from the energy sector are Par Pacific Holdings PARR and Valero Energy VLO. While Par Pacific currently sports a Zacks Rank #1 (Strong Buy), Valero Energy carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.
Par Pacific Holdings operates an integrated downstream energy business across the United States, with fuel retail operations in Hawaii, Washington and Idaho, refining operations in Hawaii, Wyoming, Washington and Montana, and a supporting logistics network. Its refineries have a combined crude oil throughput capacity of 219,000 barrels per day and produce gasoline, diesel, jet fuel, marine fuels, asphalt and other petroleum products.
Valero Energy is a leading refining player with a robust network of 14 refineries located across the United States, Canada and Peru. The company has a combined high-complexity throughput capacity of 3 million barrels per day, which distinguishes it from other independent refiners. Valero’s refineries have a combined Nelson Complexity Index of 11.5, which implies that they can process a wide variety of feedstocks, convert it into higher-value products and shift product yields according to market conditions.
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ConocoPhillips to Participate in BP's Redevelopment Project in Iraq

Key Points
It will hold 42% of a subsidiary currently 100% owned by BP.
That entity covers four oil fields in the Kirkuk region.
A major investment in the heart of a major oil-producing region was the engine driving ConocoPhillips (NYSE: COP) stock higher on Friday. The sprawling upstream oil company's shares rose by almost 2% on the news, effortlessly topping the S&P 500 index's 1% decline.
A potential gusher
Before market open that morning, ConocoPhillips announced that it agreed with BP to acquire a 42% stake in the British energy giant's BP Energy Company of Kirkuk in Iraq. The deal gives the company a large piece of four oil fields located in Kirkuk, a region in northern Iraq.
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ConocoPhillips said that the agreement formalizing the deal is expected to be signed during Iraq Prime Minister Ali al-Zaidi's current visit to Washington, D.C.
In its press release on the arrangement, the company quoted CEO Ryan Lance as saying that "this unique redevelopment opportunity is well aligned with our disciplined investment framework, providing access to a material, high-quality and long-life resource base, comfortably meeting our cost of supply threshold."
Black gold
ConocoPhillips is a pure-play upstream company, meaning that its focus is entirely on the exploration and extraction of oil. Given that, whenever it has the chance to participate fully or partially in a promising play, it's usually a win.
That goes double for Kirkuk, which is immense even by the standards of the oil-rich Middle East. While it remains to be seen how the ConocoPhillips/BP relationship within BP Energy of Kirkuk will unfold, this buy-in is almost certain to be beneficial to the American company's operations and financials.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Why ConocoPhillips Stock Flew Higher on Friday

(RTTNews) - On Friday, ConocoPhillips (COP), an oil-based energy company, announced that it has agreed to terms to gain a 42% interest in BP Energy Company of Kirkuk Ltd., supporting the current redevelopment scheme of four large-scale oil fields that are currently producing oil in the Kirkuk area in Northern Iraq.
The agreement is expected to be signed by Iraqi Prime Minister Ali al-Zaidi as a part of his official visit to Washington D.C. The transaction is expected to close by the end of 2026, effective July 1.
BP of Kirkuk holds the Development and Production Contract covering the Baba and Avanah domes of Kirkuz oil field and three adjacent fields, such as Bai Hassan, Jambur and Khabbaz.
The contract includes an initial gross recoverable resource of two billion barrels, to be recovered through rehabilitating the fields and optimization activities.
In the pre-market activity on the NYSE, the shares were trading 1.35 percent higher at $114.37, after closing Thursday's regular trading 1.24 percent up.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

ConocoPhillips Agrees With BP Of Kirkuk To Acquire 42% For Redevelopment Of Oil Fields In Iraq

Exxon MobilCorporation XOM has surged 19.5% over the past year, almost in line with the 19.4% improvement of the composite stocks in the industry. BP plc BP and Chevron CVX, two other integrated players in the same space, have gained 19.6% and 9.7%, respectively, over the same time frame.
Since XOM is a large integrated energy giant, investors interested in the stock might have been assessing how the ongoing oil pricing environment is impacting its business fundamentals. Let’s delve deeper into ExxonMobil’s business outlook before concluding on whether to invest in the stock.
Can XOM's Upstream Business Thrive With Oil Below $70?
ExxonMobil has a massive footprint in the Permian, the most prolific oil and gas play in the United States, and offshore Guyana. In the Permian, the integrated giant has been employing lightweight proppant technology and hence is capable of boosting its well recoveries by up to as much as 20%.
According to the data from the Federal Reserve Bank of Dallas, the shut-in price for existing wells in the Midland, a sub-basin of the Permian, is $42 per barrel. For Delaware, another sub-basin, the Federal Reserve Bank of Dallas estimated the price at $34 per barrel.
With West Texas Intermediate (“WTI”) crude oil trading below the $70-per-barrel mark, significantly above the shut-in prices, it makes sense for XOM to continue production in the wells. On the first-quarterearnings call XOM mentioned that it is on track with its plan of growing its production in the most prolific basin to 1.8 million oil-equivalent barrels this year.
ExxonMobil’s Robust Balance & Dividend Commitment
Investors should also keep in mind that XOM has a strong balance sheet, on which it could rely during an unfavorable business environment. The debt-to-capitalization of ExxonMobil is 15.4%, which is significantly lower than 29.6% of the industry’s composite stocks.
Coming to the integrated energy giant’s dividend commitment story, over the past 43 years, ExxonMobil has been rewarding shareholders with annual dividend hikes at an average rate of 5.8%.
Should Investors Bet on the Stock Now?
Before concluding, we should also consider that WTI crude oil is now significantly down from the more than $100-per-barrel mark reached in May this year. With upstream operations responsible for XOM’s significant earnings generation, softer commodity prices are likely to have hurt the company’s bottom line, as they are affecting both BP and CVX.
Also, XOM is currently trading at a premium. The stock is trading at a trailing 12-month EV/EBITDA multiple of 9.06x, which is higher than the broader industry average of 5.49x. BP and CVX, two other integrated majors, are valued at 2.83x and 8.82x, respectively.
Thus, investors shouldn’t rush to bet on the overvalued ExxonMobil stock right away. Those who have already invested may hold the stock. Currently, XOM carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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After an Almost 20% One-Year Run, is ExxonMobil Still Worth Buying?

(RTTNews) - BP PLC (BP, BP_UN.TO, BP.L, BPE5.DE), a major British oil and gas company, said on Monday that it has decided to sell its non-operated interest in the Bay du Nord project offshore Newfoundland and Labrador, Canada, to Equinor ASA (EQNR, EQNR.OL).
The sale aims for portfolio simplification and disciplined capital allocation. Gordon Birrell, Executive Vice President, Upstream, said: "We're proud of our partnership with Equinor and the work we've done together to develop the Bay du Nord project. However, bp is exercising strict capital discipline, allocating it to the opportunities that create the most value for bp."
Bay du Nord is located in the Flemish Pass Basin, around 500 kilometers offshore Newfoundland and Labrador. The British company holds interests across 10 licenses associated with the Bay du Nord project, representing an average working interest of 37.212%. Equinor is the operator.
BP will continue to hold 100% interest in 2 exploration licenses offshore Newfoundland and Labrador.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

BP To Sell Non-Operated Interest In Bay Du Nord Project To Equinor

For Immediate Release
Chicago, IL – July 1, 2026 – Today, Zacks Equity Research discusses Exxon Mobil Corp. XOM, Chevron Corp. CVX and BP plc BP.
Industry: Oil & Gas - Integrated
Link: https://www.zacks.com/commentary/2945215/3-integrated-energy-stocks-to-gain-from-promising-industry-trend
The crude pricing environment is still promising for the integrated energy company's exploration and production operations. The integrated players also have a stable midstream business that generates cashflows during all the business cycles, thereby making the prospects of the Zacks Oil and Gas Integrated International industry promising.
Due to their integrated business model, Exxon Mobil Corp, Chevron Corp. and BP plc are well-positioned to make the most of the promising business environment.
About the Industry
The Zacks Oil and Gas Integrated International industry covers companies primarily involved in upstream, midstream and downstream operations. These companies have upstream businesses in the United States (including prolific shale plays and the deepwater Gulf of Mexico), Asia, South America, Africa, Australia and Europe. Midstream operations of energy companies entail transporting oil, natural gas liquids and refined petroleum products.
In downstream businesses, the firms buy raw crude to produce refined petroleum products. The companies' downstream activities involve chemical businesses that manufacture raw materials for making plastics. The integrated players are now gradually focusing on renewables, leading to the energy transition. The firms aim to lower emissions from operations and cut the carbon intensity of the products sold.
3 Trends Shaping the Future of the Industry
Favorable Oil Price to Aid Cash Flows: The price of West Texas Intermediate ("WTI") crude is hovering around the $70 per barrel mark. The oil price is significantly higher than the shut-in prices of key resources in the United States, which is still promising for the exploration and production business of integrated players in the industry.
Sturdy Midstream Demand: With the possibility of upstream activities remaining advantageous, thanks to handsome commodity prices, oil and gas production is expected to stay satisfactory. This will likely boost the demand for pipeline and storage assets since more commodities will need to be transported and stored. Importantly, the midstream business has lower exposure to commodity price volatility since shippers generally book pipeline assets for the long term, thereby generating stable fee-based revenues.
Business Diversification: International integrated energy companies are gradually investing in the renewable business. Thus, by diversifying operations, companies will be able to capitalize on the mounting demand for cleaner energy.
Zacks Industry Rank Indicates Bullish Prospects
The Zacks Oil and Gas Integrated International industry is part of the broader Zacks Oil - Energy sector. The industry carries a Zacks Industry Rank #99, which places it in the top 40% of more than 250 Zacks industries.
The group's Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates bright near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Before we present a few stocks that you may want to bet on or keep an eye on, let's take a look at the industry's recent stock market performance and valuation picture.
Industry Outperforms the S&P 500, Lags the Sector
The Zacks Oil and Gas Integrated International industry has outperformed the Zacks S&P 500 composite over the past year, but lagged the broader Zacks Oil - Energy sector over the same time frame.
The industry has rallied 23.5% over this period compared with the S&P 500's surge of 22% and the broader sector's improvement of 24.7%.
Industry's Current Valuation
Since oil and gas companies are debt-laden, it makes sense to value them based on the Enterprise Value/Earnings before Interest, Tax, Depreciation and Amortization (EV/EBITDA) ratio. This is because the valuation metric takes not just equity into account but also the level of debt.
On the basis of the trailing 12-month EV/EBITDA, the industry is currently trading at 5.93X, lower than the S&P 500's 18.21X. It is also below the sector's trailing 12-month EV/EBITDA of 6.50X.
Over the past five years, the industry has traded as high as 7.37X and as low as 2.79X, with a median of 4.18X.
3 Integrated International Stocks to Focus on
BP is an integrated energy giant and is well-positioned to capitalize on oil prices, which are still promising, through its upstream operations. Increasing global demand for LNG will continue to support natural gas. Therefore, BP, currently carrying a Zacks Rank #3 (Hold), is well-positioned to benefit from the rising demand for clean energy. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
With upstream businesses contributing the most to its earnings, ExxonMobil's business outlook seems promising, thanks to handsome oil prices. Investors should also keep in mind that #3 Ranked XOM, has a strong balance sheet, on which it could rely during an unfavorable business environment. The debt to capitalization of ExxonMobil is at 15.44%, lower than the 29.6% of the industry's composite stocks. Coming to the integrated energy giant's dividend commitment story, over the past 43 years, ExxonMobil has been rewarding its shareholders with annual dividend hikes at an average rate of 5.8%.
Chevron is an integrated energy giant with a stable business model. In the Permian, the most prolific basin in the United States, CVX, with a Zacks Rank of 3, has a strong footprint. Also, the company has a pristine balance sheet with significantly lower debt capital exposure than the industry's composite stocks.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Zacks Industry Outlook Highlights Exxon, Chevron and BP

BP plc BP is strengthening its balance sheet through a disciplined debt-reduction strategy. The company reduced its net debt from $38.9 billion in 2020 to $22.2 billion in 2025, reflecting meaningful progress in deleveraging efforts. Although net debt increased to $25.3 billion at the end of the first quarter of 2026, the British energy major remains committed to lowering it to $14-$18 billion by the end of 2027. BP intends to achieve this goal through a combination of asset-sale proceeds, cost reductions, debt repayments and prudent capital allocation.
A key component of the strategy is portfolio optimization and asset monetization. BP expects to generate $9-$10 billion in divestment and other proceeds in 2026, including approximately $6 billion from the planned sale of Castrol. Management has indicated that excess cash from these transactions will be directed toward reducing leverage and strengthening the balance sheet. The anticipated unwinding of working-capital balances is expected to provide further cash that can be used to support debt reduction.
BP is also simplifying its capital structure by reducing hybrid financing obligations. The company plans to redeem €2.5 billion of perpetual hybrid bonds in 2026 and lower total hybrid capital from approximately $13.3 billion to $9 billion by the end of 2027. Alongside these actions, BP is targeting $6.5-$7.5 billion of structural cost savings by 2027 to enhance cash generation. Collectively, these initiatives are expected to lower financing costs, improve financial flexibility and free up additional cash flow for shareholder returns and future growth opportunities.
Are YPF & OXY Expanding Investment Opportunities via Deleveraging?
YPF Sociedad Anónima YPF and Occidental Petroleum Corporation OXY are energy companies that are benefiting from lowering their debt levels to expand investment opportunities.
Occidental Petroleum has achieved significant deleveraging, reducing its total debt by $13.9 billion in 22 months and lowering its principal debt to $13.3 billion. OXY expects to reduce its debt burden further to $10 billion going forward.
The integrated energy firm, YPF, repaid approximately $750 million in debt during the first four months of 2026 while effectively lowering future debt maturities and reducing its overall cost of debt.
Aggressively paying down principal debt significantly improves financial flexibility for YPF and OXY. By lowering financing costs and fortifying their balance sheets, both companies are better equipped to navigate commodity volatility, pursue high-yield opportunities and drive long-term competitive growth.
BP’s Price Performance, Valuation & Estimates
BP shares have gained 24.8% over the past year compared with 25.1% growth of the industry.
Image Source: Zacks Investment Research
From a valuation standpoint, BP trades at a trailing 12-month enterprise-value-to-EBITDA (EV/EBITDA) of 2.82X. This is below the broader industry average of 5.93X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for the second quarter and third quarter of 2026 earnings has been unchanged over the past seven days. Meanwhile, for the full-year 2026, BP’s earnings estimates have seen downward revisions.
Image Source: Zacks Investment Research
BP currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Here's How BP Enhances Financial Strength With Deleveraging Efforts

The crude pricing environment is still promising for the integrated energy company’s exploration and production operations. The integrated players also have a stable midstream business that generates cashflows during all the business cycles, thereby making the prospects of the Zacks Oil and Gas Integrated International industry promising.
Due to their integrated business model, Exxon Mobil Corporation XOM, Chevron Corporation CVX and BP plc BP are well-positioned to make the most of the promising business environment.
About the Industry
The Zacks Oil and Gas Integrated International industry covers companies primarily involved in upstream, midstream and downstream operations. These companies have upstream businesses in the United States (including prolific shale plays and the deepwater Gulf of Mexico), Asia, South America, Africa, Australia and Europe. Midstream operations of energy companies entail transporting oil, natural gas liquids and refined petroleum products. In downstream businesses, the firms buy raw crude to produce refined petroleum products. The companies’ downstream activities involve chemical businesses that manufacture raw materials for making plastics. The integrated players are now gradually focusing on renewables, leading to the energy transition. The firms aim to lower emissions from operations and cut the carbon intensity of the products sold.
3 Trends Shaping the Future of the Industry
Favorable Oil Price to Aid Cash Flows: The price of West Texas Intermediate (“WTI”) crude is hovering around the $70 per barrel mark. The oil price is significantly higher than the shut-in prices of key resources in the United States, which is still promising for the exploration and production business of integrated players in the industry.
Sturdy Midstream Demand: With the possibility of upstream activities remaining advantageous, thanks to handsome commodity prices, oil and gas production is expected to stay satisfactory. This will likely boost the demand for pipeline and storage assets since more commodities will need to be transported and stored. Importantly, the midstream business has lower exposure to commodity price volatility since shippers generally book pipeline assets for the long term, thereby generating stable fee-based revenues.
Business Diversification: International integrated energy companies are gradually investing in the renewable business. Thus, by diversifying operations, companies will be able to capitalize on the mounting demand for cleaner energy.
Zacks Industry Rank Indicates Bullish Prospects
The Zacks Oil and Gas Integrated International industry is part of the broader Zacks Oil - Energy sector. The industry carries a Zacks Industry Rank #99, which places it in the top 40% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates bright near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Before we present a few stocks that you may want to bet on or keep an eye on, let’s take a look at the industry’s recent stock market performance and valuation picture.
Industry Outperforms the S&P 500, Lags the Sector
The Zacks Oil and Gas Integrated International industry has outperformed the Zacks S&P 500 composite over the past year, but lagged the broader Zacks Oil - Energy sector over the same time frame.
The industry has rallied 23.5% over this period compared with the S&P 500’s surge of 22% and the broader sector’s improvement of 24.7%.
One-Year Price Performance
Industry's Current Valuation
Since oil and gas companies are debt-laden, it makes sense to value them based on the Enterprise Value/Earnings before Interest, Tax, Depreciation and Amortization (EV/EBITDA) ratio. This is because the valuation metric takes not just equity into account but also the level of debt.
On the basis of the trailing 12-month EV/EBITDA, the industry is currently trading at 5.93X, lower than the S&P 500’s 18.21X. It is also below the sector’s trailing 12-month EV/EBITDA of 6.50X.
Over the past five years, the industry has traded as high as 7.37X and as low as 2.79X, with a median of 4.18X.
Trailing 12-Month EV/EBITDA Ratio
3 Integrated International Stocks to Focus on
BP is an integrated energy giant and is well-positioned to capitalize on oil prices, which are still promising, through its upstream operations. Increasing global demand for LNG will continue to support natural gas. Therefore, BP, currently carrying a Zacks Rank #3 (Hold), is well-positioned to benefit from the rising demand for clean energy. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Price and Consensus: BP
With upstream businesses contributing the most to its earnings, ExxonMobil’s business outlook seems promising, thanks to handsome oil prices. Investors should also keep in mind that #3 Ranked XOM, has a strong balance sheet, on which it could rely during an unfavorable business environment. The debt to capitalization of ExxonMobil is at 15.44%, lower than the 29.6% of the industry’s composite stocks. Coming to the integrated energy giant’s dividend commitment story, over the past 43 years, ExxonMobil has been rewarding its shareholders with annual dividend hikes at an average rate of 5.8%.
Price and Consensus: XOM
Chevron is an integrated energy giant with a stable business model. In the Permian, the most prolific basin in the United States, CVX, with a Zacks Rank of 3, has a strong footprint. Also, the company has a pristine balance sheet with significantly lower debt capital exposure than the industry’s composite stocks.
Price and Consensus: CVX
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While some believed the technology was years away, it is already present and moving fast. Large hyperscalers, such as Microsoft, Google, Amazon, Oracle, and even Meta and Tesla, are scrambling to integrate quantum computing into their infrastructure.
Senior Stock Strategist Kevin Cook reveals 7 carefully selected stocks poised to dominate the quantum computing landscape in his report, Beyond AI: The Quantum Leap in Computing Power.
Kevin was among the early experts who recognized NVIDIA's enormous potential back in 2016. Now, he has keyed in on what could be "the next big thing" in quantum computing supremacy. Today, you have a rare chance to position your portfolio at the forefront of this opportunity.
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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.