BP Stock Today: December 26 — $6B Castrol Sale Speeds Deleveraging
The BP Castrol sale is setting the tone for US trading today. Shares of BP drew attention after the company agreed to sell 65% of Castrol to Stonepeak at a $10.1 billion valuation, bringing in $6 billion in cash. Management plans to use proceeds to cut debt and advance a $20 billion divestment plan. With oil majors focused on balance sheet strength and payouts, this move could improve financial ratios and help sustain dividends and buybacks if cash flow holds up.
Deal impact: debt, cash, and capital returns
BP is selling a 65% stake in Castrol to Stonepeak at a $10.1 billion enterprise value, yielding $6 billion in cash. The transaction supports BP asset divestments toward its $20 billion target and simplifies the portfolio. Proceeds are earmarked for deleveraging, which can lower interest costs and widen flexibility for future capital returns. Coverage: WSJ and BBC.
Key ratios show why deleveraging matters. Debt-to-equity is 1.28 and interest coverage is 3.80. Net debt to EBITDA stands at 1.26. A $6 billion cash inflow can push these measures lower and support credit quality. With a 5.66% dividend yield and ongoing buybacks in focus, steadier leverage can help sustain payouts while funding core energy and transition projects.
The BP Castrol sale accelerates a shift toward higher-return assets and simpler operating lines. Castrol remains a strong brand, but monetizing a majority stake raises cash without heavy earnings dilution. The move also reduces capex needs tied to the unit, freeing room for upstream projects, trading, and select low-carbon investments. Execution will be key to meet deleveraging and return targets.
Stock setup and valuation after the news
Latest available quote shows BP at $34.31, down 0.27 on the day, with a 1-year change of 28.35%. Analysts list 10 Buy and 5 Hold ratings with a consensus target of $41.50, median $40.50, and a range of $29 to $51. The next earnings announcement is scheduled for February 10, 2026, per company data. The BP Castrol sale keeps the stock on watch.
Valuation skews mixed: P/E is 58.46, price-to-book 1.52, and EV/EBITDA 18.10. Free cash flow yield is 2.00% and dividend yield is 5.66%. The BP Castrol sale could reduce net debt, modestly lowering enterprise value and interest expense, which supports equity value. Investors should weigh yield support and balance sheet gains against earnings sensitivity to commodity prices.
BP’s ADR trades on the NYSE, offering deep liquidity for US accounts. Average volume is 6.95 million shares versus recent volume of 3.13 million. Year range runs from $25.22 to $37.64. Price sits below the 50-day average of $35.31 but above the 200-day at $32.72. The Stonepeak Castrol deal may help sentiment if closing and deleveraging arrive on schedule.
Technical view: momentum and levels to watch
Technical indicators lean cautious. RSI is 43.08, MACD is below signal, and ADX is 23.31, suggesting a mild trend. Price is near the Keltner middle band at $34.98 and under the Bollinger middle band at $35.35. The BP Castrol sale news could shift momentum, but confirmation requires a sustained move back above short-term averages with rising volume.
Nearby levels are defined by volatility bands. Immediate support sits near the lower Keltner channel at $33.62 and Bollinger lower band at $33.17. Resistance appears at the 50-day average of $35.31 and Bollinger middle band at $35.35. A close above $35.35 opens a test of $36 to $37.50, while a break below $33.50 risks a move toward the 200-day at $32.72.
Catalysts include deal closing updates, debt paydown milestones, and capital return guidance. Watch cash flow, net debt to EBITDA, and interest coverage in upcoming disclosures. A firm improvement in leverage metrics, tied to the BP Castrol sale proceeds, would support a higher range. Weak commodity prices or delays could cap rallies near the 50-day average.
Final Thoughts
For US investors, the BP Castrol sale is a clear step toward simpler operations and a stronger balance sheet. A $6 billion cash inflow gives BP room to cut debt, trim interest costs, and protect its dividend. On fundamentals, leverage and coverage ratios should improve if proceeds are directed to debt reduction as planned. On market context, shares trade below the 50-day average with mixed momentum readings, so confirmation will likely come from updates on closing, net debt, and buyback pace. Actionable takeaway: track management’s use of funds and watch for leverage metrics trending lower. If those boxes get checked, risk-reward improves for income-focused holders. This article is for information only, not investment advice.
FAQs
BP agreed to sell a 65% stake in Castrol to Stonepeak at a $10.1 billion valuation. The transaction brings in $6 billion in cash to BP. Management plans to use the proceeds to reduce debt and advance its broader $20 billion asset divestment program, while keeping strategic flexibility for future investments and returns.
Lower debt and interest expense can support steady dividends and ongoing buybacks, provided cash flow remains solid. BP’s dividend yield is 5.66% based on recent data. If the $6 billion is used for deleveraging as planned, that strengthens coverage and offers capacity for shareholder returns without stretching the balance sheet.
Focus on net debt to EBITDA, interest coverage, and overall debt-to-equity. Current figures show 1.26x, 3.80x, and 1.28x, respectively. Also watch updates on the closing timeline, any debt repayment announcements, and management commentary on buybacks and capital allocation in the next earnings update and filings.
Analysts show a constructive tilt with 10 Buy and 5 Hold ratings and a $41.50 consensus target versus a recent price of $34.31. The deal supports deleveraging, but valuation is mixed with a 58.46 P/E and 18.10 EV/EBITDA. A better entry may follow confirmed debt paydowns and a break above the 50-day average.
Disclaimer:
The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.
