2024-05-08 10:46:46 ET
Summary
- BP reported decent Q1 earnings due to pricing support for petroleum products, leading to resilient earnings.
- OPEC+ actions to extend production limits are expected to further support BP's earnings.
- OPEC+ supply extensions, a $2.0B cost-savings plan and capital returns are levers for earnings growth.
- The risk profile for BP remains skewed to the upside, as shares trade at a 14% earnings yield.
BP ( BP ) reported solid first fiscal quarter earnings on Tuesday, yet the energy firm missed consensus top and bottom line results. BP saw a sequential increase in its average liquids prices, due to profound tailwinds to petroleum pricing in the first-quarter... due to the OPEC+ members extending voluntary supply cuts. As a result, BP continued to rake in a ton of earnings and free cash flow in the first fiscal quarter, a part of which is going to flow back to shareholders in the form of dividends and stock buybacks. With shares of BP continuing to sell at a very attractive valuation based off earnings (7.2X P/E), I believe the risk profile remains widely skewed to the upside in FY 2024, especially if BP continues to make progress towards its stated cost-savings targets!...
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BP Q1: Still A Buy With A 5% Yield, Trading At 7x P/E