Current Price
$42.78
PE Ratio (TTM)
34.2x
Intrinsic Value
$40.32
-6.1% margin of safety
What Is BP p.l.c.'s Fair Value?
As of 2026-06-12, applying a 34.0x earnings multiple to BP p.l.c.'s (BP) earnings per share of $1.25 yields a fair value estimate of $40.32 per share, versus a market price of $42.78.
Fair value from earnings multiples is sensitive to the multiple you choose. Across the sensitivity grid the estimate spans $34.07 to $47.42. This is a relative estimate anchored to earnings, not a statement of fact. For a cash flow based view, see the intrinsic value estimate on the DCF page.
How our PE model works · Recalculate in PE mode · BP intrinsic value (DCF view)
Is BP p.l.c. (BP) Overvalued?
At $42.78, BP trades about 6.1% above its PE-based fair value estimate, a modest premium over the applied earnings multiple. Check whether earnings growth justifies the price.
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 Scale
As a major integrated oil and gas company, BP benefits from strong brand recognition and economies of scale. This allows for efficient operations and market influence.
↑Technological Expertise
The company leverages advanced technology and deep expertise in complex extraction and processing. This is crucial for accessing and developing challenging hydrocarbon reserves.
INVESTMENT RISKS
↓Commodity Price Volatility
BP's profitability is highly sensitive to fluctuating global oil and gas prices. Geopolitical events and economic downturns can significantly impact revenue.
↓Energy Transition Pressures
The global shift towards renewable energy sources poses a long-term threat to fossil fuel demand. BP faces pressure to adapt its business model and invest in cleaner alternatives.
↓Regulatory and Environmental Scrutiny
The industry faces increasing regulatory oversight and environmental concerns. Potential litigation, as indicated by recent investigations, adds to this risk.
Base case
BP base case PE valuation
Intrinsic Value
$40.32
Margin of safety
-6.1%
Expected annual return
-1.2%
Base case assumptions: 5.7% annual earnings growth, 34x target PE, 10% discount rate, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the BP PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for BP p.l.c. respond.
Open PE 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 PE Stock Valuation Data
PE Ratio (TTM)
34.2x
PEG Ratio
n/m
Earnings Yield
2.92%
ROE (TTM)
5.5%
Revenue/Share (TTM)
$12.51
Dividend Yield
4.84%
Debt/Equity
1.33x
Frequently Asked Questions
What is the PE ratio of BP?
The trailing twelve-month PE ratio of BP reflects how much investors pay per dollar of BP p.l.c.'s earnings. This metric is most useful when compared to Oil & Gas Integrated peers and the company's own historical range.
Is BP overvalued based on PE ratio?
BP's PE of 34.2x combined with a PEG ratio of -0.02 provides a growth-adjusted perspective. BP has negative earnings, so its PE and PEG ratios are not meaningful here and cannot tell you whether the stock is over or undervalued. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Oil & Gas Integrated, a DCF analysis may be more appropriate.
How do I value BP stock using PE ratio?
To value BP p.l.c. using PE: (1) Compare the current PE (34.2x) against the Oil & Gas Integrated median to assess relative pricing, (2) check the PEG ratio (-0.02) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of BP?
BP's PEG ratio is -0.02, calculated by dividing the PE ratio (34.2x) by the expected earnings growth rate. Because BP has negative earnings, its PEG ratio is not meaningful and should not be read as a sign of under or overvaluation. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for BP stock valuation?
PE ratio gives a quick relative read — how BP is priced versus Oil & Gas Integrated peers. DCF provides an absolute value based on projected free cash flows. For the most reliable valuation, use PE as a quick comparability screen and DCF for a deeper fundamental analysis. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See BP DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Energy valuationsP/E and DCF value BP with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.