BP's $6 Billion Castrol Cash Lands as Analysts Lift Targets and Crude Slides
Published on 11/07/2026 at 04:12 | Editorial boerse-global.de
BP closed the sale of a 65% stake in its Castrol lubricants business to Stonepeak on Monday, banking $6 billion after tax — a cash injection that arrived the same day the stock came under pressure from a sharp drop in crude prices.
Freedom Capital Markets responded to the company's recent results by raising its price target on BP's depositary receipts to $51 from $43, keeping a Hold rating. The brokerage pointed to the strong quarterly figures and reduced debt, while cautioning that favourable market conditions may not last and that production is trending lower.
Crude Slide Weighs on the Sector
Reuters reported that oil prices fell more than 7% as talks between Iran and Qatar raised hopes of an end to the US-Israeli war with Iran. BP was among the early decliners in the FTSE 100, according to media reports, which cited the unwinding of the geopolitical risk premium as a drag on the oil sector. The talks also fed expectations of a stabilisation in crude supply from the Middle East, Reuters said. Ithaca Energy and Shell also lost ground on Monday.
Earnings Beat Backs the Bull Case
The analyst move follows third-quarter 2026 results published just over a week ago. BP reported an adjusted replacement cost profit of $8.458 billion, against $2.210 billion in the same period a year earlier. Reuters attributed the surge to higher refining margins and stronger gas and marketing trading.
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Operating cash flow reached $14.8 billion, including a $0.5 billion working capital release. BP said higher adjusted results underpinned the cash flow, with increased income tax payments partly offsetting the gain. Net debt stood at $13.9 billion at the quarter's end, and the company said its cash generation had accelerated the strengthening of its balance sheet.
Those headline numbers came alongside net write-downs of $4.1 billion, which BP said related mainly to businesses tied to the energy transition.
Divestment Programme Running Ahead of Plan
The Castrol transaction leaves BP with a 35% holding in the business, with proceeds earmarked to reduce financial obligations. A separate disposal of part of its Aker BP stake also brought in fresh funds: BP sold a 5% interest at NOK 311 per share, raising roughly NOK 9.83 billion, or about $1.06 billion. That price represented a 12% discount to Aker BP's previous close, according to Reuters.
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BP retained a 10.9% stake in Aker BP, subject to a 90-day lock-up. Combined, the two deals prompted the company to lift its guidance for divestment and other proceeds in 2026 to around $9 billion — roughly $1 billion more than previously planned.
Investors will get a fuller picture on 15 December 2026, when BP holds its strategy and outlook update.
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