BP hits $35B debt target ahead of schedule, with buybacks likely coming

BP +2.8% pre-market after saying it is on track to reduce its net debt to $35B in the just-completed quarter..., nearly a year earlier than expected and a level it previously has said could trigger share buybacks.

BP posted a $5.7B loss last year and had amassed $39B in debt by the end of 2020 - a level it expected would rise in H1 2021 - but it says it received $4.7B from sale proceeds during Q1, and it now expects sale proceeds for the full year will come in at the top end of the anticipated $4B-$6B range.

BP previously expected to reach the debt target between Q4 2021 and Q1 2022.

"We estimate that at $60/bbl oil prices, the company will be buying back $2B-$2.5B in shares annually," Berenberg analyst Henry Tarr says.

BP says it is aiming for $25B from disposals through 2025, and so far it has completed $14.7B in transactions and received ~$10B.

BP has endured numerous challenges over the past decade, but its valuation and dividend suggest the stock still holds considerable appeal, Ian Bezek writes in a bullish analysis published on Seeking Alpha.