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BP (BP) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

In the latest trading session, BP (BP) closed at $40.21, marking a -1.18% move from the previous day. This change lagged the S&P 500's 0.34% loss on the day. At the same time, the Dow lost 0.09%, and the tech-heavy Nasdaq lost 0.43%.

Coming into today, shares of the oil and gas company had gained 0.62% in the past month. In that same time, the Oils-Energy sector gained 4.19%, while the S&P 500 gained 4.46%.

Wall Street will be looking for positivity from BP as it approaches its next earnings report date. On that day, BP is projected to report earnings of $0.82 per share, which would represent a year-over-year decline of 3.53%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $79.79 billion, up 3.74% from the year-ago period.

BP's full-year Zacks Consensus Estimates are calling for earnings of $3.22 per share and revenue of $301.77 billion. These results would represent year-over-year changes of -15.26% and -0.65%, respectively.

It is also important to note the recent changes to analyst estimates for BP. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 6.16% lower. BP currently has a Zacks Rank of #5 (Strong Sell).

Looking at its valuation, BP is holding a Forward P/E ratio of 12.64. Its industry sports an average Forward P/E of 12.2, so we one might conclude that BP is trading at a premium comparatively.

It is also worth noting that BP currently has a PEG ratio of 1.78. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Oil and Gas - Integrated - International was holding an average PEG ratio of 1.87 at yesterday's closing price.

The Oil and Gas - Integrated - International industry is part of the Oils-Energy sector. This group has a Zacks Industry Rank of 239, putting it in the bottom 7% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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