What Analysts Recommend for BP



Analyst ratings for BP

In this series, we’ve examined BP’s Q4 2018 estimates, segmental outlook, stock returns, and stock price estimate range before its earnings release on February 5, 2019. In this part, we’ll look at the analyst ratings for BP.

BP has been rated by a total of 11 Wall Street analysts. Of the total, six analysts have assigned “buy” or “strong buy” ratings, four have assigned “hold” ratings, and one analyst has assigned a “sell” rating on the stock. Recently, Jefferies cut its target price on BP stock to $44.5 per share. BP’s mean target price of $49 per share implies a 22% gain from the current level.

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Why mixed opinions on BP

BP has a healthy upstream project pipeline, which is likely to bring in volume growth for the company. Plus, BP is expected to witness a rise in its fourth-quarter upstream earnings.

However, BP has high debt on its balance sheet compared to leading global integrated peers ExxonMobil (XOM), Chevron (CVX), and Royal Dutch Shell (RDS.A). BP’s total-debt-to-total-capital ratio stood at 38% in the third quarter. In comparison, ExxonMobil, Chevron, and Shell’s ratio stood at 17%, 19%, and 28%, respectively, in Q3 2018. Thus, better growth prospects but higher debt have presumably led to mixed ratings on the stock.

Analyst ratings for BP’s peers

Shell, Chevron, and ExxonMobil have been rated as a “buy” by 82%, 74%, and 32% of analysts, respectively. Other global integrated players like Suncor Energy (SU), Total (TOT), and YPF (YPF) have been rated as “buy” by 92%, 100%, and 79% of analysts, respectively.


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