Redburn Atlantic Downgrades BP, Cuts Shell Price Target Amid Oil Market Weakness

Redburn Atlantic lowered its price targets for Shell (LON: SHEL) and downgraded BP (LON: BP.) in a note this week, citing a deteriorating macroeconomic outlook for the oil market.

In a research note, the analysts at Redburn Atlantic said that updated supply-demand modeling suggests that OPEC+ will have to further delay the unwinding of voluntary production cuts.

This, in turn, has led the firm to lower its 2025 oil price assumptions from $80 to $75 per barrel.

Furthermore, the firm said it sees buybacks in the sector coming under pressure next year and is taking a more cautious view.

As a result of the weaker oil price outlook, Redburn downgraded BP to Neutral from Buy while also cutting its price target for the oil giant to 500p from 570p a share.

For Shell, the price target has been lowered to 3,200p from 3,400p, although the firm retained a Buy rating on the stock.

The price target cuts and BP downgrade come on the heels of similar moves by other analysts. Earlier this week, Bernstein Research also cut price targets for both BP and Shell, citing concerns about potential headwinds in the oil market next year.

The combined negative analyst coverage has put pressure on the shares of both companies. BP's stock price has fallen by over 4% in the last month and is down over 12% for the year-to-date, while Shell's shares have declined 3% in the last month, although they are up more than 5% in 2024.