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BP plc. (BP)
NYSE:BP
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BP
(NYSE:BP)61Neutral
Positive Factors
Financial Goals
BP's fundamental reset, updated financial goals with lower costs, reduced debt, and consistent shareholder returns could result in a valuation uplift.
Shareholder Returns
BP expects to consistently return 30-40% of adjusted cash flow from operations to shareholders, comparable to peers.
Negative Factors
Production
BP expects lower upstream production and seasonally lower volumes in Customers business.
Stock Performance
BP's shares have meaningfully underperformed peers and the SPX.
Valuation
BP's valuation multiples lag behind US and European IOC peers.
BP (BP) vs. S&P 500 (SPY)
Market Cap
$85.79B
Dividend Yield5.79%
Average Volume (3M)13.17M
Price to Earnings (P/E)224.6
Beta (1Y)0.31
Revenue Growth-9.97%
EPS Growth-98.08%
CountryUS
Employees65,835
SectorEnergy
Sector Strength57
IndustryFossil Fuels
Share Statistics
EPS (TTM)0.10
Shares Outstanding2,709,436,300
10 Day Avg. Volume11,495,288
30 Day Avg. Volume13,170,878
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.40
Price to Cash Flow (P/CF)5.10
P/FCF Ratio9.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$34.65Price Target Upside7.58% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
BP Business Overview & Revenue Model
Company DescriptionBP (British Petroleum) is a global energy company headquartered in London, United Kingdom. It operates in all areas of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation, and trading. BP is also investing in renewable energy sources and technologies, such as biofuels, wind, and solar power, as part of its commitment to transitioning towards a low-carbon future.
How the Company Makes MoneyBP generates revenue primarily through its upstream and downstream operations. The upstream segment involves the exploration, development, and production of oil and natural gas, which are sold to various markets. The downstream segment includes refining crude oil, manufacturing petrochemicals, and marketing oil products. BP operates a network of retail service stations worldwide and engages in trading activities in the energy markets. The company also invests in renewable energy projects and technologies, although these currently contribute a smaller portion of its overall revenue. Key factors influencing BP's earnings include global oil prices, production volumes, and refining margins, alongside strategic partnerships and joint ventures that expand its market reach and enhance operational efficiency.
BP Financial Statement Overview
Summary
BP faces challenges with declining revenue and profitability, evidenced by reduced margins and a significant drop in net income. However, it maintains moderate financial stability with a manageable debt-to-equity ratio and strong cash flow generation, supporting its operations.Income Statement
BP's income statement reveals a mixed performance with declining total revenue from 2023 to 2024 and a significant drop in net income. The gross profit margin decreased from 22.21% in 2023 to 15.98% in 2024, indicating reduced efficiency in core operations. The net profit margin also fell drastically from 7.31% in 2023 to a meager 0.20% in 2024. However, the company maintained a stable EBIT margin of 6.79% in 2024, down from 22.54% in the previous year. Despite the overall decrease in profitability, BP's EBITDA margin improved slightly from 20.87% in 2023 to 15.25% in 2024 due to cost control measures.70
Positive
Balance Sheet
BP's balance sheet shows moderate financial stability with a debt-to-equity ratio of 1.21 in 2024, reflecting leverage that could pose risks in a volatile industry. The return on equity (ROE) significantly dropped to 0.64% in 2024 from 21.67% in 2023, indicating weakened profitability relative to shareholders' equity. The equity ratio slightly improved to 20.98% in 2024, suggesting a small increase in equity financing, although it remains relatively low, highlighting potential financial risk.65
Positive
Cash Flow
BP's cash flow statement indicates solid cash generation capabilities with a free cash flow of $12 billion in 2024, despite a decrease from $17.75 billion in 2023. The operating cash flow to net income ratio was high at 71.64, showcasing strong cash earnings relative to reported profits. The free cash flow to net income ratio improved to 31.50 in 2024, underlining effective cash management amidst declining profitability.75
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 189.19B | 208.35B | 241.39B | 157.74B | 105.94B | Gross Profit |
| 30.24B | 64.06B | 55.10B | 22.86B | 10.18B | EBIT |
| 14.84B | 46.98B | 44.76B | 15.09B | -346.00M | EBITDA |
| 28.85B | 43.50B | 29.43B | 28.37B | -7.03B | Net Income Common Stockholders |
| 381.00M | 15.24B | -1.36B | 7.57B | -20.73B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 39.37B | 28.59B | 29.77B | 30.96B | 29.53B | Total Assets |
| 282.23B | 280.29B | 288.12B | 287.27B | 267.65B | Total Debt |
| 71.55B | 63.08B | 55.49B | 69.79B | 81.93B | Net Debt |
| 32.34B | 35.33B | 26.30B | 39.11B | 52.73B | Total Liabilities |
| 203.91B | 194.80B | 205.13B | 196.83B | 182.09B | Stockholders Equity |
| 59.25B | 70.28B | 67.55B | 75.46B | 71.25B |
| Cash Flow | Free Cash Flow | |||
| 12.00B | 17.75B | 28.86B | 12.72B | -144.00M | Operating Cash Flow |
| 27.30B | 32.04B | 40.93B | 23.61B | 12.16B | Investing Cash Flow |
| -13.25B | -14.87B | -13.71B | -5.69B | -7.86B | Financing Cash Flow |
| -7.30B | -13.36B | -28.02B | -18.08B | 3.96B |
BP Technical Analysis
Neutral
32.21
Price Trends
31.61
Positive
30.37
Positive
31.70
Positive
Market Momentum
0.04
Positive
48.51
Neutral
36.28
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BP, the sentiment is Neutral. The current price of 32.21 is below the 20-day moving average (MA) of 33.24, above the 50-day MA of 31.61, and above the 200-day MA of 31.70, indicating a neutral trend. The MACD of 0.04 indicates Positive momentum. The RSI at 48.51 is Neutral, neither overbought nor oversold. The STOCH value of 36.28 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for BP.
BP Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $115.32B | 11.61 | 16.16% | 3.44% | -2.57% | -14.01% | |
76 Outperform | $277.42B | 16.08 | 11.28% | 4.22% | -1.90% | -14.56% | |
75 Outperform | $45.70B | 16.41 | 27.41% | 1.27% | 20.51% | 99.86% | |
73 Outperform | $485.12B | 13.91 | 14.38% | 3.56% | 1.86% | -11.52% | |
72 Outperform | $44.48B | 19.33 | 8.88% | 1.86% | -4.35% | -37.69% | |
61 Neutral | $85.79B | 224.58 | 0.59% | 5.79% | -9.97% | -98.08% | |
57 Neutral | $8.34B | 5.35 | -5.98% | 7.29% | 0.20% | -69.45% |
* Energy Sector Average
Performance Comparison
BP
BP
32.21
-2.47
-7.12%
CVX
Chevron
157.57
11.98
8.23%
COP
Conocophillips
92.90
-18.88
-16.89%
XOM
Exxon Mobil
111.80
7.02
6.70%
HES
Hess
148.24
3.57
2.47%
OXY
Occidental Petroleum
47.36
-12.72
-21.17%
BP Earnings Call Summary
Earnings Call Date: Feb 11, 2025 | % Change Since: -5.13% | Next Earnings Date: Apr 29, 2025
Earnings Call Sentiment Neutral
Despite challenges in the refining sector and biofuels margins, BP demonstrated strong strategic progress with an increase in upstream production, a robust dividend growth, and significant cost reductions. The company's strategic reshaping and commitment to shareholder returns offset the negative impacts, suggesting a mixed but slightly positive outlook.Highlights
Dividend Growth and Share Buybacks
BP increased its dividend per share by 10% and announced $7 billion of share buybacks, including $1.75 billion announced during the call.
Upstream Production Increase
Upstream production was around 2.36 million barrels per day, up 2% for the year with plant reliability above 95%.
Strategic Portfolio Reshaping
Significant strategic progress included 10 new FIDs, new access to Iraq and India, divesting tail assets in Trinidad, and exiting the Empire Wind in the U.S. offshore.
Successful Cost Reduction
BP achieved $750 million in structural cost reductions, reflecting a focused portfolio and efficiency improvements.
Lowlights
Refining Segment Challenges
BP faced a difficult year in refining with a widening outage in 1Q, a challenging margin environment, and was impacted by weaker biofuels margins and a trucking recession impact on TA.
Biofuels Margin Pressure
Biofuels margins, particularly in Europe, were suppressed due to oversupply from Asia and Nordic countries rolling back voluntary mandates to EU levels.
Impact of U.S. Tariffs on Canadian Crude
Uncertainty around U.S. tariffs on Canadian crude affected Whiting's refining margins, with potential impacts on market dynamics being difficult to predict.
Company Guidance
During BP's Fourth Quarter and Full Year Results Call for 2024, several performance metrics and strategic updates were discussed. BP's upstream production increased by 2% to approximately 2.36 million barrels per day, achieving plant reliability above 95%. Despite facing challenges in refining due to outages and a difficult margin environment, BP maintained a robust trading performance, delivering an average 4% uplift to group ROACE over the past five years. The company announced a 10% increase in dividend per share and $7 billion in share buybacks, including $1.75 billion announced during the call. BP highlighted 10 new FIDs, strategic portfolio reshaping, and various acquisitions and divestments, including full ownership of BP bioenergy and Lightsource BP. The call also addressed cost reductions, with $750 million of structural reductions achieved, and plans for a comprehensive strategy update at the upcoming Capital Markets event.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.