why is bp stock so low

Even worse, the oil major is still paying appreciable amounts for that accident every year. In 2019, nine years after the accident, BP paid $2.4 billion (24% of its earnings) for the accident. The company paid another $1.4 billion in the first half of this year. Therefore, the accident continues to burden the cash flows of BP significantly. A side effect of the pandemic is the accelerated growth of investments in renewable energy sources.

BP commits to Germany with $11 billion low-carbon investment push – Yahoo Finance

BP commits to Germany with $11 billion low-carbon investment push.

Posted: Wed, 13 Sep 2023 04:04:00 GMT [source]

(0.00%), Citadel Advisors LLC (0.00%), CMT Capital Markets Trading GmbH (0.00%), Russell Investments Group Ltd. (0.06%) and New York State Common Retirement Fund (0.04%). 15 employees have rated BP Chief Executive Officer Bernard Looney on Glassdoor.com. Bernard Looney has an approval rating of 63% among the company’s employees. This puts Bernard Looney in the bottom 25% of approval ratings compared to other CEOs of publicly-traded companies. The company is scheduled to release its next quarterly earnings announcement on Tuesday, November 7th 2023. The company was founded in 1908 with the purpose of exploring for and producing oil in the middle east.

BP falls Thursday, underperforms market

Recently, Shell adjusted the value of its assets by more than $4.5 billion. Murray Auchincloss, the company’s chief financial officer, will run the business on an interim basis while BP seeks a replacement. The company added that any decisions, including any payments made to Looney for his resignation, would be disclosed when its annual accounts and reports were published. BP’s stock is owned by a variety of retail and institutional investors. Top institutional shareholders include Lazard Asset Management LLC (0.24%), Optiver Holding B.V.

Even major swing producers – namely the Opec cartel – are struggling to ramp up output despite higher production targets. What followed has to be one of the biggest ever U-turns in advantage of micr global energy policy. 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.

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, https://1investing.in/ 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.

When you add it all up, BP doesn’t look like a particularly great choice in the energy patch right now. For investors still looking for an oil play, conservatively financed Chevron is probably a better option. It’s entirely possible that BP pulls off its big plans for change without a hitch. But most investors would probably be better off watching that transformation safely from the sidelines for now. BP, formerly known as British Petroleum, doesn’t have the best track record when it comes to dividends.

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These revisions helped boost BP’s consensus estimate, increasing from $3.77 to $3.82 in the past 60 days. Looking at the next fiscal year, 5 estimates have moved upwards while there have been no downward revisions in the same time period. For BP, shares are up 7.99% over the past week while the Zacks Oil and Gas – Integrated – International industry is up 4.34% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 22.51% compares favorably with the industry’s 9.46% performance as well. BP has to model its financials to make these promises and it is using a conservative oil price of $60/barrel as its base case.

why is bp stock so low

Reuters provides business, financial, national and international news to professionals via desktop terminals, the world’s media organizations, industry events and directly to consumers. The lower share buyback “will more than offset the good operational performance as BP is the first international oil company…to cut buybacks this quarter,” Jefferies analysts said in a note. To conclude, BP is currently facing a perfect storm, partly for its own sins and partly for reasons beyond its control. As usual in such cases, the stock has been beaten to the extreme. The pandemic is likely to subside next year thanks to a vaccine and thus the global demand for oil products is likely to recover.

Woodfire LNG Announces Its Third Sales Deal With BP

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For example, the International Energy Agency (IEA) believes that the soaring prices will lead to demand destruction, which will lower prices. However, in a separate report, Energy Aspects believes that oil will rise to $130 per barrel. The imbalance between supply and demand has sent the oil price surging, bringing bumper profits to oil giant BP. Rupert Hargreaves looks at the numbers and asks if BP shares deserve a place in your portfolio. According to the issued ratings of 12 analysts in the last year, the consensus rating for BP stock is Moderate Buy based on the current 1 sell rating, 4 hold ratings and 7 buy ratings for BP.

Maintaining Returns

One example is the recent acquisition of American renewable natural gas producer, Archaea Energy, for $3.3 billion in cash. It also completed the acquisition of a 40.5% stake in one of the world’s largest renewables and green hydrogen energy hub projects in Q3. 12 Wall Street research analysts have issued “buy,” “hold,” and “sell” ratings for BP in the last twelve months. There are currently 1 sell rating, 4 hold ratings and 7 buy ratings for the stock. The consensus among Wall Street research analysts is that investors should “moderate buy” BP shares. BP p.l.c. currently operates through 4 segments including Gas & Low Carbon Energy, Oil Production & Operations, Customers & Products, and Rosneft segments.

why is bp stock so low

Roughly a decade ago it was involved in a major oil spill in the Gulf of Mexico. The company changed its name following that event and the financial impact forced it to sell assets (effectively repositioning its business) and cut its dividend. A good momentum benchmark for a stock is to look at its short-term price activity, as this can reflect both current interest and if buyers or sellers currently have the upper hand. It’s also helpful to compare a security to its industry; this can show investors the best companies in a particular area. It is also useful to compare a security to its industry, as this can help investors pinpoint the top companies in a particular area. Looking at the history of these trends, perhaps none is more beloved than value investing.

BP (BP) Stock Forecast, Price & News

Its return on average capital employed (ROACE) – the company’s preferred measure of operating performance – hit 12.1% in 2021 compared to 9.9% eight years ago. The big new direction at BP, meanwhile, sounds pretty much like a complete corporate overhaul. The company is talking about changing from an integrated oil company to an integrated energy company via investing in clean energy and electricity assets. That’s not particularly different from what some of its European peers are doing; Royal Dutch Shell and Total (TTE 0.09%) have both been investing in electricity assets, too. Shell, for reference, has also chosen to cut its dividend at this point.

There is a lot of debate surrounding which metrics are the best to focus on and which are poor quality indicators of future performance. The Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue for us. I believe BP’s low valuation and sensible energy transition strategy and improving financial position make the risk-reward ratio very favorable for investors. Although I have some reservations about the CFO Murray Auchincloss, I am a big fan of CEO Bernard Looney.

Investors of record on Friday, August 11th will be paid a dividend of $0.4362 per share on Friday, September 22nd. This represents a $1.74 dividend on an annualized basis and a dividend yield of 4.58%. This is an increase from the stock’s previous quarterly dividend of $0.40. Reuters, the news and media division of Thomson Reuters, is the world’s largest multimedia news provider, reaching billions of people worldwide every day.

In other words, the liabilities for the accident have nearly offset all the earnings of the oil major over the last decade. The pandemic is the primary factor behind the material losses of BP this year but the collapse of the stock near its 25-year lows cannot be attributed solely to the pandemic per se. The stock finished down 1.3% after spending much of the day in the green. The oil giant said late in the U.S. session that Looney, a company veteran, was “not fully transparent” about past personal relationships with colleagues.