why is stock price of bp low

Full Answer

Is BP’s stock price too low to invest?

BP’s stock price should stay low for a while, but demand will recover in the coming years. That’s where BP will earn money for investors who choose to invest soon or hold on. Recently, Bernard Looney, an employee of BP since 1991 was promoted to the role of CEO. Looney looks like the right guy to lead the company.

Is BP plc selling low and buying high?

Meanwhile, BP has been exiting energy assets in the middle of an industry downturn, so it probably isn't getting top dollar when it sells. Usually you want to buy low and sell high -- but in BP's haste, it seems like it might be selling low and buying high.

What pulls BP stock down?

Debt levels pull BP stock down. The less debt that exists, the more money that can be given back to investors in the form of dividends, and the more money that can be reinvested into productive assets. And during this pandemic, they’ve added significantly more debt.

What happened to BP after oil prices fell to zero?

But there was another unsettling event that took place that only energy traders will likely remember: Oil prices fell, briefly, below zero. The oil market got so bad so quickly that several industry giants laid out plans for a greener future, including BP ( NYSE:BP). Here are some things to consider before you decide to buy into BP's big makeover.

See more

Why are BP stocks so low?

In early October 2020, shares in BP (LSE: BP) fell to a multi-decade low as investors rushed to dump their holdings of the oil and gas giant, questioning its very survival. Today the firm's outlook could not be more different.

Is BP a good stock to buy right now?

BP is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 4.97 right now. For comparison, its industry sports an average P/E of 7.17. Over the last 12 months, BP's Forward P/E has been as high as 11.04 and as low as 4.90, with a median of 7.35.

Should I hold or sell BP stock?

There are currently 1 sell rating, 6 hold ratings and 11 buy ratings for the stock. The consensus among Wall Street analysts is that investors should "moderate buy" BP stock.

Is BP a good stock for 2022?

BP's Stock Price Performance In 2022 Year-to-date BP's share price grew by +17.4% in 2022 thus far, and this was much better than the S&P 500's -7.5% decline over the same period. It is no surprise that BP's shares have done well on an absolute market and also outperformed the broader market.

Which is better BP or Shell?

At current historical PE multiples, BP is currently offering better value than Shell, and will pay investors a higher dividend.

What is the future of BP stock?

Based on 11 Wall Street analysts offering 12 month price targets for BP p.l.c. in the last 3 months. The average price target is 508.18p with a high forecast of 700.00p and a low forecast of 400.00p. The average price target represents a 26.98% change from the last price of 400.20p.

Is BP a good stock to buy Zacks?

BP p.l.c. - Hold Zacks' proprietary data indicates that BP p.l.c. is currently rated as a Zacks Rank 3 and we are expecting an inline return from the BP shares relative to the market in the next few months.

When did BP last pay a dividend?

Jun 23, 2022BP's last dividend payment date was on Jun 23, 2022, when BP shareholders who owned BP shares before May 11, 2022 received a dividend payment of $0.32 per share.

Does BP have a future?

The strong progress bp has made over the past few years has reinforced its confidence in the delivery of its earnings and returns targets for 2025. In addition, it is now aiming to continue to grow EBITDA through to 2030.

Is BP undervalued?

BP has a low P/E ratio (forward) of 5.6 X which implies that the firm's shares remain undervalued. Petroleum prices remain above $100 a barrel, and new sanctions on Russian oil exports could drive prices even higher in the short term.

How high will BP stock go?

Stock Price Forecast The 26 analysts offering 12-month price forecasts for BP PLC have a median target of 35.96, with a high estimate of 50.42 and a low estimate of 29.35.

BP share price value

Investor sentiment towards BP has plunged this year for two primary reasons. For a start, the oil price has collapsed. This has had a significant impact on the company’s profits. At the same time, the shift away from dirty hydrocarbons towards renewable energy has accelerated.

Long-term outlook

BP is currently facing a challenging operating environment. But I reckon it’s only a matter of time before the company’s turnaround starts to gain traction.

Undervalued

All of the above suggests to me that the BP share price is undervalued at current levels. As the business progresses with its plans to invest more in renewable energy and cut costs, profits should rise in the years ahead. At the same time, investors can look forward to that market-beating 7.3% dividend yield.

Global footprint

The first reason is its global footprint. The company’s international operations produce hydrocarbon products for consumers worldwide, giving the corporation diversified income streams.

The wild card in the BP share price

In BP, there is also a wild card. The company owns nearly 20% of Russian oil producer Rosneft.

Strong balance sheet

I also believe the market is overlooking the company’s strong balance sheet.

Green energy transition

I think the market is also overlooking the company’s green energy ambitions. By 2030, the group expects to be spending $5bn a year on low-carbon energy projects, up from just $1.5bn in 2021. To put this number into perspective, the organisation spent $4.7bn on gas and low-carbon projects last year. It spent a similar amount on oil production.

BP share price valuation

I believe that all of the above qualities could drive BP’s profits higher in the years ahead. A strong balance sheet gives the organisation room to invest in its green energy drive. Rising profits provide additional cash flow, and the firm’s international operations provide some protection against oil price volatility.

Risks ahead

Despite all of the above, I think it would be a mistake for me to say that this is a risk-free investment. The firm might have to overcome plenty of challenges in the years ahead.

The bottom line

Despite these risks, I think the BP share price looks incredibly appealing as an investment at current levels. Not only is the company cheap compared to its peers, but it also has several growth initiatives in play that should help support earnings expansion over the next couple of years.

What to consider before buying into BP?

Here are some things to consider before you decide to buy into BP's big makeover. 1. A bold promise. International energy giant BP announced in Aug. 2020 that it would be going "from [an] international oil company to [an] integrated energy company.".

Is BP getting top dollar?

Meanwhile, BP has been exiting energy assets in the middle of an industry downturn, so it probably isn't getting top dollar when it sells. Usually you want to buy low and sell high -- but in BP's haste, it seems like it might be selling low and buying high. 3. Working off a (relatively) weak base.

Is BP in bad shape?

To be fair, BP's balance sheet isn't in terrible shape per se, but the company is looking to make drastic and costly changes from a position of relative weakness. That's not reassuring, and helps explain why it may need to sell assets quickly, since layering on even more debt would likely displease investors greatly. 4.

Is the Dividend Safe?

Over the years, dividend-paying shares, like BP stock, have been darlings, especially among passive income-seeking investors. The British energy giant is still paying a quarterly dividend. Thanks to the sagging stock price, the current yield stands at 10.64%. When it reported Q1 earnings, the board decided to keep the dividend intact.

So Should You Invest in BP Stock Now?

BP stock started 2020 at around $40 before hitting a low of $15.51 in March. Yet today, the stock is about $23. Put another way, so far in the year, investor confidence in the business has taken a beating.

Is oil still king?

Alternative fuel sources will continue to challenge and garner attention, but oil is still king.

Will BP stop drilling?

However, there’s no need to worry that BP will stop drilling for oil any time soon: Not only is 2050 nearly 30 years away, but also Looney cut his teeth in drilling and exploration. While he says all of the right things for an oil executive in 2020, he remains just that – an oil executive.

Ownership

Release

Example

• 11 Wall Street analysts have issued 1 year price targets for BP's shares. Their forecasts range from $41.00 to $90.00. On average, they expect BP's stock price to reach $58.55 in the next twelve months. This suggests a possible upside of 41.1% from the stock's current price. View Analyst Price Targets for BP.

See more on marketbeat.com

Ratings

Reception

Business

Transport