UK-based oil and gas company BP PLC (GB:BP) (BP) gained over 2% as of writing after its Q2 net profit (underlying replacement cost profit) of $2.8 billion beat analysts’ estimates of $2.6 billion. Additionally, the company raised its dividend by 10% to 8 cents per share and aims to carry out a $1.75 billion share buyback over the next three months.
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Shareholders welcomed the results, especially after the company’s previous warning about lower refining margins earlier this month.
BP is a multinational energy company involved in the exploration, production, and distribution of oil and natural gas.
Highlights from BP’s Q2 Results
During the second quarter, BP generated a significant amount of operating cash flow of $8.1 billion, up from $6.3 billion a year ago. Another highlight of the results was the reduction in the company’s net debt. In Q2 2024, BP reduced its net debt to $22.6 billion from $23.7 billion in the prior-year quarter.
BP further confirmed the previously announced impairment charge of $1.5 billion in Q2. This charge was partly attributed to the company’s ongoing review of the Gelsenkirchen plant in Germany.
Analysts’ Reactions
Analyst Biraj Borkhataria from RBC Capital described BP’s Q2 results as “resilient” and mentioned a slight outperformance on the bottom line, mainly due to a lower-than-expected tax rate. He further stated that the dividend increase was ahead of market expectations. Borkhataria thinks that a reduction in net debt would be a favorable aspect for investors.
Meanwhile, Goldman Sachs analyst Michele Della Vigna confirmed a Buy rating on BP stock after the results. He predicts 34% upside potential in BP’s share price.
Is BP a Buy, Hold, or Sell?
According to TipRanks consensus, BP stock has received a Moderate Buy rating based on nine Buys, two Holds, and one Sell recommendation. The BP share price forecast is 622.92p, which implies 35% upside potential at the current trading level.
