Nevertheless, while BP stated that the demand for gasoline and diesel improved to 85-90% of its normal level in August, the demand for its aviation fuel remained 70% lower than a year ago. Como funciona bitcoins Overall, BP is expected to post a loss of -$1.16 per share this year. BP trades at less than four times forward adjusted earnings, even after strong price action in recent months.

These projects are not going to produce returns immediately, and could prove to be a drag on profits for years to come, only adding to the uncertainty for these enterprises. BP said it expects oil and European gas prices to remain strong in the second quarter even as refining profit margins are expected to weaken due to lower diesel prices. Mending the balance sheet is another one of its key goals today, along with completely reshaping the company. When you step back, there's a lot going on here and it's all happening at the same time. On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the “Value” category.

  • For some people, low blood pressure may be a sign of an underlying health condition, especially when it drops suddenly or occurs with symptoms.
  • Indeed, BP has axed new exploration outside of areas where it already has licenses, reserves and resources.
  • This is a positive change from the stock's previous quarterly dividend of $0.40.
  • The big new direction at BP, meanwhile, sounds pretty much like a complete corporate overhaul.

Meanwhile, management intends to put as much as 40% of its capital spending each year into non-oil investments. The problem for investors is that BP is basically jumping in with both feet. If this move turns out to be a strategic misstep, best days to trade forex it's not going to be easy to fix. The value of your investments can go down as well as up and you may get back less than you put in. Tax treatment depends on your individual circumstances and may be subject to future change.

yield and a P/E of just 6. No wonder this is my favourite FTSE 100 stock

BP had the most catastrophic accident in the history of the oil industry in the Gulf of Mexico, in 2010. As the accident occurred a decade ago, most investors have completely forgotten about it, thinking that it does not affect the stock of BP anymore. In summary, BP offers excellent long-term total cash returns and is a very worthwhile purchase. Oil and gas producers face a constant struggle to maintain production. An oil well requires continual investment to maintain production, and sooner or later, the well will run dry. BP and its peers are always looking for new prospects and this costs huge amounts of money.

  • BP had reported a $6.25 billion profit in the first quarter of 2022, on its way to a record $28 billion annual figure.
  • That said, analysts at Jefferies have estimated that the tax could cost BP $100m in 2022 and $800m in 2023, just 5% of total group net profit.
  • This stock's P/B looks solid versus its industry's average P/B of 1.53.
  • It's not a great picture when you look at key industry metric return on capital employed (ROCE).
  • Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
  • President Biden vetoed the bill — notably his first presidential veto — on March 20.

Only a couple of months ago, policymakers were setting out plans to reduce global hydrocarbon production for good, but now they’re rushing to drive up supply. BP is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. BP's Forward P/E has been as high as 7.66 and as low as 3.94, with a median of 5.52, all within the past year. For example, the International Energy Agency (IEA) believes that the soaring prices will lead to demand destruction, which will lower prices.

They may have other tax implications, and may not provide the same, or any, regulatory protection. Exchange rate charges may adversely affect the value of shares in sterling terms, and you could lose money in sterling even if the stock price rises in the currency of origin. Any performance statistics that do not adjust for exchange rate changes are likely to result in an inaccurate portrayal of real returns for sterling-based investors.

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Reuters, the news and media division of Thomson Reuters, is the world’s largest multimedia news provider, reaching billions of people worldwide every day. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. BP also said it expects to pay $1 billion under a UK windfall tax on the oil and gas sector between May 2022 and April 2023. Shell is currently trading with a Forward P/E ratio of 4.94 while its PEG ratio sits at 0.52.

Is BP Stock a Buy?

Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that BP and SHEL is an impressive value stock right now. Over the past year, SHEL's P/E has been as high as 9.46, as low as 4.40, with a median of 6.65; its PEG ratio has been as high as 2.37, as low as 0.48, with a median of 0.79 during the same time period.

He has been named Reporter of the Year in 2014 and 2021 by Reuters. Before Reuters, Ron reported on equity markets in New York in the aftermath of the 2008 financial crisis after covering conflict and diplomacy in the Middle East for AFP out of Israel. Before lower-cost producers were bent on ramping up production as they could remain profitable at much lower prices than the developed countries. BP claims that it breaks even at roughly $40 per barrel which is on the high side of producers. In any case, it is unlikely that we see oil prices anywhere close to that level as long as OPEC+ remains unified.

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Clearly, a global recession would be bad for oil and gas prices and refining margins, reducing BP’s profitability. But in my view, this has already been priced in, and more, into BP’s stock. It is focused on rolling out electric vehicle charging stations and at increasing basket sizes to capture higher margins at its service stations. So, while the long-term demand for oil might be downwards, BP knows this, and along with Shell plc (SHEL), is the supermajor that realizes this best. So, this very low P/E ratio, even remembering earnings are cyclical, is just too low. But its leadership said returns from the company’s renewable energy investments have been disappointing.

September’s 3 Most Intriguing Stocks for Daring Investors

The UK energy giant set its oil and gas production guidance at a 40% reduction vs. 2019 levels by 2030. That means BP would produce around 2.3 million barrels of oil equivalent per day by 2025, trimming that to 2 million barrels of oil equivalent per day by 2030. Energy has been by far the best-performing sector this year, in fact one of the very few industries that’s up on the year.

During this time he had developed a deep understanding of the financial markets and the factors that influence them. Rishi Sunak’s windfall tax on North Sea oil producers has done little to dampen City growth expectations. According to analysts at Citigroup, because of spending on decommissioning of aged-out infrastructure, these Big Oil producers are already “tax negative” in the UK. That said, analysts at Jefferies have estimated that the tax could cost BP $100m in 2022 and $800m in 2023, just 5% of total group net profit. In this environment it is not surprising that BP and its Big Oil peers are minting cash. BP announced bumper profits for the first quarter of 2022 while Shell’s quarterly income hit a record.

For some people, low blood pressure may be a sign of an underlying health condition, especially when it drops suddenly or occurs with symptoms. While all these are bearish signs, the stock has also formed a falling wedge pattern that is shown in purple. Therefore, the stock will likely bounce back since a falling wedge is usually a bullish reversal sign. If this happens, the next key resistance point to watch will be at 400p. These figures are just a handful of the metrics value investors tend to look at, but they help show that BP and Shell are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, BP and SHEL feels like a great value stock at the moment.

Brent has dropped to about $105 from the year-to-date high of more than $136. Still, we believe BP will do well in the next few months as oil prices are expected to remain above $85. At the same time, the company will benefit from the soaring demand during summer, even as prices at the pump remain elevated. OPEC+’s willingness to maintain production cuts that the organization had made to combat the fall in demand brought about by the pandemic has been a boon for BP. WTI and Brent crude are both up more than 100% compared to this time last year and are well on their way to all-time highs.

The stock has also dropped as investors price in the possibility of a recession in the coming months. BP shares are trading at 382p, which is about 19% below the highest point this year of 456p. Other energy shares like Tullow Oil, Shell, and ExxonMobil have all retreated. The British oil and gas giant has operations in 80 countries forex trading strategies worldwide and employs a workforce of 70,000. It produces around 3.8 million barrels of oil equivalent per day and has total proven reserves of 19.34bn barrels of oil equivalent. Similar to BP, Shell appeared to also signal the company would shift more of its focus back to oil and gas production, easing its focus on ESG criteria.

In addition, they still consume a significant portion of the cash flows of the oil major every year. Given also the extremely generous dividends of BP over the last decade, it is easy to understand how the oil major has accumulated an excessive debt load. During boom times, the market may almost ignore the debt of a company but during downturns, such as the ongoing one, a high debt load weighs heavily on the stock price.