Current Price
$43.87
Intrinsic Value
$67.4
+34.9% margin of safety
What Is BP p.l.c.'s Intrinsic Value?
As of 2026-07-30, the base-case DCF model estimates the intrinsic value of BP p.l.c. (BP) at $67.4 per share, compared with a market price of $43.87, a margin of safety of +34.9%. The base case assumes 2.2% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $58.99 to $77.36. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is BP p.l.c. (BP) Undervalued?
At the current price of $43.87, BP trades well below the base-case intrinsic value estimate, a margin of safety above 30%. By this model the stock looks undervalued, but verify the growth assumptions match your own view before acting.
COMPETITIVE MOAT
↑Global Integrated Infrastructure
BP possesses extensive global infrastructure for exploration, production, refining, and distribution. This integrated network creates significant barriers to entry for new competitors.
↑Brand Recognition and Loyalty
BP's established brand offers a degree of customer recognition and loyalty, particularly in its retail fuel operations. This can translate into consistent demand for its products.
↑Scale and Operational Expertise
The sheer scale of BP's operations provides cost advantages through economies of scale. Decades of experience foster deep operational expertise in complex energy extraction and processing.
INVESTMENT RISKS
↓Energy Transition and Decarbonization
The global shift towards renewable energy sources poses a long-term existential threat to traditional oil and gas business models. BP must navigate this transition effectively to remain relevant.
↓Commodity Price Volatility
BP's profitability is highly sensitive to fluctuations in global oil and gas prices. Geopolitical events and supply/demand imbalances can lead to significant earnings swings.
↓Geopolitical Instability
Operations in various regions expose BP to geopolitical risks, including political unrest, nationalization, and changes in government policies. These factors can disrupt supply chains and impact asset values.
Base case
BP base case valuation
Intrinsic Value
$67.4
Margin of safety
+34.9%
Expected annual return
+9.0%
Base case assumptions: 2.2% annual growth, 10.0% discount rate, 10x exit multiple, 5 year projection. Data as of 2026-07-30.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the BP valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for BP p.l.c. respond.
Open DCF Calculator for BPCompany Overview
BP p.l.c. operates as a global energy company, offering a wide array of carbon-based and sustainable products and services. Its operations are structured across three primary segments: Gas & Low Carbon Energy, Oil Production & Operations, and Customers & Products. The Gas & Low Carbon Energy division is responsible for the extraction and integrated generation of natural gas and power. It actively trades gas and both renewable and non-renewable electricity. This segment also manages onshore and offshore wind farms and develops innovative solutions like hydrogen production and carbon capture and storage facilities. Meanwhile, the Oil Production & Operations segment focuses on crude oil extraction. The Customers & Products arm encompasses a diverse portfolio, including convenience stores and retail fuel sales, electric vehicle charging infrastructure, and the Castrol lubricants brand. It extends its reach to aviation and business-to-business (B2B) services, alongside midstream operations (like transportation and storage), refining activities, oil trading, and the expanding bioenergy sector. Established in 1908, BP maintains its headquarters in London, United Kingdom.
Financial Metrics — BP Stock Valuation Data
Revenue/Share (TTM)
$75.05
FCF/Share (TTM)
$4.43
ROIC (TTM)
4.6%
ROE (TTM)
5.5%
P/FCF
9.9x
EV/EBITDA
4.3x
FCF Yield
10.11%
Debt/Equity
1.33x
Based on trailing twelve-month data, BP shows a free cash flow per share of $4.43 and a ROIC of 4.6%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 9.9x and FCF yield of 10.11% are important context metrics when evaluating BP's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of BP?
BP p.l.c. currently generates $4.43 in free cash flow per share. At the current price of $43.87, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is BP undervalued?
BP trades at a P/FCF ratio of 9.9x with a free cash flow yield of 10.11%. A low P/FCF means investors are paying less per dollar of free cash flow; whether that is cheap depends on the company's growth, cyclicality, and capital intensity. However, whether BP is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value BP stock using DCF?
To perform a DCF valuation on BP p.l.c.: (1) Start with the trailing free cash flow per share ($4.43) as the base, (2) project future FCF growth over 5-10 years based on Oil & Gas Integrated industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting BP's risk profile — with a debt-to-equity of 1.33x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to BP?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For BP p.l.c., this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Oil & Gas Integrated trends, then discounting those amounts to today's dollars. BP's ROIC of 4.6% means the company's return on invested capital sits below the level that typically clears its cost of capital.
How does WACC affect BP stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For BP, with a debt-to-equity ratio of 1.33x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 4.3x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See BP PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Energy valuationsDCF and P/E value BP with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-07-30. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.