It’s been a bumpy ride, but BP‘s (LSE:BP.) share price has enjoyed strong gains over the last five years. At 437.7p per share, the FTSE 100 company’s risen 51% in value.
That’s not a bad return when you also factor in dividends. However, it’s far below what other oil major shares have delivered in that time. Shell‘s share price, for instance, is up 89% over a five-year horizon.
City analysts think this could all be about to change though. One especially optimistic analyst reckons BP shares will increase to 832p during the next 12 months. That represents an uplift of 90% from current prices.
That’s a staggering potential improvement on recent years. With the FTSE company ditching its green energy goals to refocus on oil, and bringing in a new CEO to oversee this strategy change, many believe a price rally is possible.
The question is: how realistic is it to expect BP’s share price to almost double over the next year?
Positive thinking
It’s important to note that this price estimate is just one of 29 currently in place. And there are some substantial differences in opinion between brokers today.
Having said that, forecasters are largely positive on their outlook for the FTSE 100 company. The average price target among them is nowhere near the 832p described above. But at 503.6p, it still suggests a juicy 15% uplift from current levels.
Analysts are encouraged by BP’s pivot back to fossil fuels. It hasn’t come without cost — this month, the firm announced $4bn-$5bn of impairments from dumping its green energy ambitions. But refocusing on what it does best is perhaps a good move. In 2025, it started seven major new projects ahead of schedule.
On the downside, high levels of debt remain a worry for investors. But more clean energy assets could be sold to reduce these fears. It’s targeting net debt of $14bn-$18bn by 2027, down from $22bn-$23bn at the end of 2025.
BP’s new chief executive Meg O’Neill is due to take up the reins in April. If she can repeat some of the successes at Austalia’s Woodside Energy, including new project execution and steady production growth, a price bounce may well be on the cards.
What could go wrong?
Yet BP faces significant risks that could limit any share price gains. In fact, there’s a chance they could slump given the current state of the oil market.
Oil values have risen in recent weeks following political turbulence in Iran and Venezuela. Yet the threat of market oversupply remains severe, and a fresh price plunge is possible given rising production and uncertain demand. Brent crude touched four-year lows below $60 a barrel in December.
As well as impacting BP’s profits, it could have significant ramifications for the company’s debt reduction plan, sending investors running for cover.
There’s also execution risk related to its revamped growth strategy and new leadership. While O’Neill had notable successes at Woodside, the firm still delivered underwhelming returns at times versus the broader industry.
Bottom line on BP shares
On balance, I think a 90% increase in BP’s share price is an unlikely scenario in the current climate. But that’s not to say it won’t enjoy a healthy bounce over the next year. While risky, the FTSE share could be worth consideration for more adventurous investors.
