(MONEY Magazine) – After British Petroleum (BP, traded on the NYSE as an American Depositary Receipt; $53.25; estimated 1993 sales of $58 billion) announced in August 1992 that it would cut its quarterly dividend from $1.21 a share to 64 cents, the stock tumbled. By November, it had thudded to $41.50, down 52% from its 1990 high of $86. Since then, however, the shares have rallied nearly 30% because of BP's bold turnaround program. ''British Petroleum is way ahead of schedule,'' says Paul B. Ting, an analyst at Oppenheimer & Co. in New York City, who recently added the stock to the firm's recommended list. Analyst James J. Murchie at Sanford C. Bernstein in New York City figures earnings will rebound to about $3 a share this year, up from $2.10 in '92, and then go on to hit $4.50 next year. British Petroleum got into trouble back in the late 1980s, when it began pouring money into costly exploration projects. That capital spending spree pushed up debt to a high of $16.3 billion last year -- or about half of total capital. To revive its fortunes, the company began a three-step recovery program in mid-'92. First, the dividend was slashed, which would conserve about $750 million of cash a year. Second, the company announced that it would cut annual costs $1 billion by 1995, chiefly by reducing its staff by 10%, or 11,500 workers. Finally, BP has said it plans to sell $3 billion of assets by 1995 and use most of the proceeds to pay off debt. Analyst Frank P. Knuettel at Prudential Securities expects the stock, which yields 3.2%, to rise more than 22% to $65 a share within 12 months, and Murchie has a similar price target. Ting thinks BP could hit $70 over the next 18 months. Including the yield, that would represent nearly a 35% total return.