Is BP’s stock set to explode in 2025? Expert predictions revealed!

Investing in the stock market can feel like a rollercoaster ride. The BP (LSE: BP) share price has had its fair share of ups and downs in 2024. Despite a challenging year, the stock appeared undervalued to me, prompting me to make a move and buy shares of the FTSE 100 oil and gas giant in September and November when they were trading at less than six times earnings.

1. Early Days of Investment: As a new shareholder, I have faced a 7.7% loss so far. However, my investment horizon spans across years, possibly even decades. It’s essential to keep in mind that short-term fluctuations should not deter long-term goals.
2. Tough Times for BP Investors: Existing BP investors have experienced a significant decline of 18.93% in the stock price over the past 12 months. The trailing yield of 5.95% offers some relief, but not enough to offset the losses incurred. The volatility in the oil prices has been a major driving factor behind these fluctuations.
3. Rally Potential for BP: Looking ahead, the question that arises is whether this FTSE 100 stock can rally strongly in the coming year. BP’s business footprint extends beyond oil production, but its shares remain intrinsically tied to the energy market. The unpredictability of various geopolitical and economic factors makes it challenging to gauge the stock’s future trajectory.
4. Expert Opinions: Analysts forecast Brent crude to average $70 a barrel in the latter half of 2025. While this might not be an immediate catalyst for an uptick in BP’s share price, analysts seem optimistic about its one-year trajectory. Despite the uncertainties, experts have a median target of 505.8p, projecting a 34.25% increase from current levels.

While uncertainties loom over the energy sector, and the future of BP shares remains uncertain, I find solace in the diversification that this investment offers in my portfolio. With a historically high and rising dividend yield, backed by a sound financial standing, BP remains an attractive prospect.

In the world of investments, anticipating the future is akin to a gamble. No one can predict with absolute certainty where BP shares will stand in 2025. However, armed with a bargain valuation and a promising dividend yield, I am content to embark on this journey and watch how it unfolds.