BP’s growth estimate
In this article, we’ll discuss BP (BP), the integrated energy stock expected to post the highest fall in earnings.
BP is a British integrated energy firm with downstream, upstream, and Rosneft segments. BP ranks fifth among six integrated firms with an estimated fall of 11% in EPS in 2019. In 2018, BP’s adjusted EPS (per ADS) stood at $3.8. In 2019, BP is estimated to post EPS of $3.4. Further, BP is expected to post EPS of $0.7 in Q1 2019, which is likely to fall by 10% YoY.
BP has a strong upstream projects pipeline that is expected to bring in hydrocarbons growth. The company began six major upstream projects in 2018. Further, BP (BP) expects 16 major projects to begin production between 2019 and 2021. Overall, the 35 projects that have started since 2016 cumulatively are expected to contribute about 900 thousand barrels of oil equivalent per day of new production, net to BP, by 2021.
Valuations and dividends
BP trades at a forward PE of 12.6x, below the peer average of 14.5x. The lower valuations that the market accords to BP could be due to its debt position, which does not look comfortable. BP’s total debt-to-capital ratio is higher than the peer average.
However, BP’s current dividend yield stands at 5.5%, above the peer average of 4.6%. Moreover, BP is repurchasing shares to offset scrip dilution. In 2018, BP’s share buybacks stood at $0.4 billion.
Overall, BP has a higher dividend yield and lower valuation but is expected to see a fall in earnings in 2019.
Tiffany (TIF) posted mixed fourth-quarter results (for the fiscal period ended January 31) on March 22. The company's top line missed analysts’ estimate and fell on a year-over-year basis.
Broadcom (AVGO) stock fell ~8.5% after markets closed yesterday following the semiconductor giant's fiscal 2019 second-quarter earnings release. It missed analysts' revenue estimate and cut its fiscal 2019 revenue guidance by $2 billion to $22.5 billion due to sluggishness in its semiconductor solutions business.
The SPDR Gold Shares ETF (GLD), which tracks physical gold prices, has underperformed the broader markets year-to-date, rising just 4.4% compared to the S&P 500’s (SPY) gain of 15.9% as of June 14. The sentiment for gold, however, has been turning around.
Safe havens such as Treasuries and gold were back in favor on June 14 as stocks fell due to rising tensions in the Middle East, concerns over growth, and the looming threat of the US-China trade war. The tech-heavy Nasdaq Composite Index fell 0.67% in the first hour of trading.
Lululemon (LULU) stock rose 2.1% on June 13 in reaction to better-than-expected first-quarter results and an upgraded outlook for fiscal 2019 overall. The company's first-quarter adjusted EPS grew 34.5% to $0.74 on revenue growth of 20.4% to $782.32 million. Analysts had expected EPS of $0.70 and revenue of $755.31 million. Here's why the outlook got an upgrade.
As of 4:40 AM Eastern Time today, US crude oil active futures were at $51.83, ~4% below their closing level in the previous week. If US crude oil prices stay at those levels today, they'll mark their third week of decline in five weeks.
Amazon is discontinuing its Amazon Restaurants service, which has been delivering food for restaurants in parts of the United States. Amazon Restaurants launched in the United States in 2015 and entered the British market the following year. However, it met strong opposition in the British market.