eyeQ: time to fill up on BP?
Experts at eyeQ have used AI and their own smart machine to analyse macro conditions and generate actionable trading signals. Here, it analyses the FTSE 100 oil giant in the wake of Q2 results.
5th August 2025 10:27
by Huw Roberts from eyeQ
“Our signals are crafted through macro-valuation, trend analysis, and meticulous back-testing. This combination ensures a comprehensive evaluation of an asset's value, market conditions, and historical performance.” eyeQ
- Discover: eyeQ analysis explained | eyeQ: our smart machine in action | Glossary
BP
Macro Relevance: 69%
Model Value: 386.71p
Fair Value Gap: +6.18% premium to model value
Data correct as at 5 August 2025. Please click glossary for explanation of terms. Long-term strategic model.
BP (LSE:BP.) has had a decent run of good news of late. A major oil discovery in Brazil was already announced and today’s Q2 results contained a fair amount of additional cheer - earnings beat expectations, the oil giant will continue its share buyback programme, boosted dividends, cut costs, and its divestment plans seem to be taking shape.
The stock was rewarded with a modest (3%) rally, but one that’s taken it to a four-month high. So far, so good.
eyeQ, however, offers a warning. Macro conditions improved over June/July, but that progress has since stalled. Model value has started to fall once again.
It’s only a small move but, over the last two weeks, macro model value is down 4.2%. BP wants strong economic growth and commodity markets that move higher. Unfortunately, the last few weeks has seen economic data come out soft and Donald Trump’s tariffs caused a huge down move in copper prices.
That divergence between the share price’s rally and falling model value leaves the stock just over 6% rich on our metrics. That’s not quite sufficient to trigger a bearish signal but we’re getting close.
There could yet be more good news on the company’s restructuring plans. Next month, a new chair joins and the hope is that new leadership will help provide fresh momentum.
Fair enough, but BP model confidence is 69%, i.e. we’re back in a new macro regime. And macro suggests a fair degree of good news is already in the price. Even for bulls, these don’t look the best levels to chase.
Source: eyeQ. Past performance is not a guide to future performance.
Useful terminology:
Model value
Where our smart machine calculates that any stock market index, single stock or exchange-traded fund (ETF) should be priced (the fair value) given the overall macroeconomic environment.
Model (macro) relevance
How confident we are in the model value. The higher the number the better! Above 65% means the macro environment is critical, so any valuation signals carry strong weight. Below 65%, we deem that something other than macro is driving the price.
Fair Value Gap (FVG)
The difference between our model value (fair value) and where the price currently is. A positive Fair Value Gap means the security is above the model value, which we refer to as “rich”. A negative FVG means that it's cheap. The bigger the FVG, the bigger the dislocation and therefore a better entry level for trades.
Long Term model
This model looks at share prices over the last 12 months, captures the company’s relationship with growth, inflation, currency shifts, central bank policy etc and calculates our key results - model value, model relevance, Fair Value Gap.
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