BP share price to rise 70% in 12 months!? How true is that prediction?
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The year 2024 was very difficult BP (LSE:BP.) investors, with the share price down by almost a third since April. Year to date, the stock is down about 20%, which seems to be a consistent trend across British energy companies, given the recent softening of oil and gas prices.
However, a decline in the share price may also create a strong jumping off point for a pullback. And the latest 12-month share price forecasts from analysts suggest that could happen as soon as next year. In fact, one analyst predicts that the stock could be up nearly 70% by this time next year!
Predictions for December 2025
Demand for electricity is expected to continue to rise next year, driven by increased adoption of electric vehicles and the use of data centers that power AI machine learning models. With renewable infrastructure still not up to par, oil and gas prices are expected to rise throughout 2025, giving BP a welcome growth cycle.
With that in mind, it’s not too surprising to see positive share price forecasts from City analysts.
An idea | 12 Month Share Price | Potential Profit/Loss |
I have hope | 652.22 p | + 69.2% |
Average | 452.38 p | +17.4% |
Despair | 401.24p | +4.1% |
If you look at these statistics, it seems that even in the worst case, there is a positive movement. So, does that make BP shares the best stock to buy right now?
That’s not the case. It is important to remember that forecasts are not guaranteed, especially for complex commodity-driven companies like BP. And digging deeper into analyst opinions reveals a trend that gives me pause.
Many analysts have downgraded BP
Despite the expected rise in this energy stock, the number of analysts who think BP shares are worth buying today has fallen significantly from 15 December 2023 to just eight today.
Recommendation | Strong Marketing | Sell it | Hold on | Passing by | Buy it |
December 2023 | 0 | 1 | 6 | 9 | 6 |
December 2024 | 0 | 1 | 15 | 4 | 4 |
What’s going on here? There are many factors that influence BP’s performance and financial performance. However, a growing concern about this business is the emerging legislation linked to project development in the North Sea.
In July 2024, the UK High Court ruled that planning authorities for oil and gas projects must now consider both operational and final carbon emissions before granting any regulatory approvals. In other words, the government’s push to be more environmentally friendly is creating new carbon-reducing winds in this business.
Yes, BP does not only work in this region. But it still adds new uncertainty to the company’s longevity if it can successfully transition to a renewable energy business – a process that is also proving to be challenging.
An important point
BP is in a strong position. The pressure to move to renewables is putting stocks in what is defined as a “the valley of death“. Oil and gas investors are not interested in owning an energy business that is transitioning to renewables. However, at the same time, green investors are not interested until renewables become the leading energy source in their portfolio.
Needless to say, this adds a little uncertainty. So, while the shares may benefit from rising energy prices next year, this is not a business I’m rushing to add to my portfolio.
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