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Canaccord reckons downstream operations are worth more than twice their current market value

BP’s (BP.) underappreciated downstream business could add 200p to the company’s current 470.35p share price if the operations were valued in line with peers, according to investment bank Canaccord Genuity.

The term ‘downstream’ is used to describe BP’s refining, marketing and distribution interests.

Canaccord Genuity believes the market currently values these operations at $50bn. It reckons they should be valued at more than twice that amount.

BP said on 14 June that its downstream operations should generate $10bn of free cash flow by 2021 which would be sufficient to cover the company’s current dividend on its own.

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