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BP's 2Q17 Earnings Beat Estimates, Stock Rose 3.2%

PART:
1 2 3 4 5
Part 5
BP's 2Q17 Earnings Beat Estimates, Stock Rose 3.2% PART 5 OF 5

Analyzing BP’s Stock Price Forecast Range after Its Earnings

Implied volatility in BP

In the previous part, we looked at analysts’ ratings for BP (BP). In this part, we’ll look at changes in BP’s implied volatility. We’ll also estimate BP’s stock price range for the ten-day period ending on August 11, 2017.

It was lower than the 30-day average implied volatility at 17.7%. On the same day, BP’s stock price rose 3.2%.

Analyzing BP&#8217;s Stock Price Forecast Range after Its Earnings

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Peers’ implied volatility

Like BP, the implied volatility in ExxonMobil (XOM) and Royal Dutch Shell (RDS.A) fell 0.7% and 0.4%, respectively, compared to the previous day to 11.3% and 13.9% on August 1. However, the implied volatility in Chevron (CVX) rose 0.3% to 14.2% on August 1. In terms of the stock price change, Chevron’s stock price rose 1.5% on August 1. Shell and ExxonMobil’s stock prices rose 0.5% and 0.2%, respectively, on the same day.

The SPDR Dow Jones Industrial Average ETF’s (DIA) implied volatility fell 0.9% to 6.4% on August 1. Also, the SPDR S&P 500 ETF’s (SPY) implied volatility fell 3.8% to 6.9% on the day. On August 1, DIA rose 0.3% and SPY rose 0.2%.

Expected price range for BP stock

Considering BP’s implied volatility of 13.6% and assuming a normal distribution of prices (bell curve model) and standard deviation of one (with a probability of 68.2%), BP’s stock price could close between $37.1 per share and $35.5 per share in the ten-day period ending on August 11.

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