BP Trades at a Discount: Is Now the Right Time to Buy the Stock?

BP plc BP is trading at a trailing 12-month EV/EBITDA multiple of 3.27x, which is lower than the broader industry average of 6.61x. Exxon Mobil Corporation XOM and Chevron Corporation CVX, two other integrated energy majors, are valued higher at 10.03x and 9.66x, respectively. Image Source: Zacks Investment ResearchShould investors bet on the British energy giant right away, given it is cheap and oil is now in their glorious days? To conclude on this, let’s first analyze the current crude pricing environment and BP’s business fundamentals.Robust Oil Prices, Key Discoveries to Fuel BP’s UpstreamThe price of West Texas Intermediate (“WTI”) crude is trading around $100-per-barrel mark. The high price is being backed by ongoing tensions in the Middle East. The U.S. Energy Information Administration (“EIA”) in its latest short-term energy outlook projected WTI at $85.68 per barrel this year, higher than $65.40 last year. A highly favorable pricing environment for the commodity is likely to continue supporting BP's exploration and production activities, which derive a significant proportion of its earnings, similar to ExxonMobil and Chevron. Image Source: The U.S. Energy Information AdministrationThe British energy major’s production outlook seems bright, thanks to major discoveries. On its latest earnings call, BP mentioned that since the beginning of 2025, it has made 14 discoveries. BP said Bumerangue appears to be a very large oil discovery, estimated at around 8 billion barrels in place, though further appraisal work is needed to determine how much can actually be extracted and commercialized.BP’s to Reduce Financial Burden, Cost Reduction TargetsOn its first-quarter 2026 earnings call, BP mentioned its plan to slash its corporate hybrid stack, special debt-like securities with both debt and equity characteristics, by more than $4 billion by next year-end. This should reduce BP’s interest costs and will likely free up future cash flows.The integrated energy major’s cost-cutting measures are also worth mentioning. The company boasted that it has already achieved roughly 70% of its cost-cutting goal.Should Investors Bet on the Stock?BP’s price chart indicates strong investor interest in the stock. Over the past year, the stock has jumped 46.6%, outpacing the industry’s 41.1% growth, as well as XOM’s 39.6% and CVX’s 30.8% increase.One-Year Price Chart Image Source: Zacks Investment ResearchConsidering all the positive developments, it would be ideal for investors to bet on BP right away. Currently, the British energy giant sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>This article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks