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BP (BP) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

In the latest trading session, BP (BP) closed at $45.23, marking a +1.57% move from the previous day. This move outpaced the S&P 500's daily gain of 0.11%. Elsewhere, the Dow lost 0.32%, while the tech-heavy Nasdaq added 0.19%.

Heading into today, shares of the oil and gas company had gained 4.46% over the past month, outpacing the Oils-Energy sector's gain of 2.95% and the S&P 500's gain of 3.84% in that time.

BP will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.67, down 14.1% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $53.02 billion, down 23.33% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.19 per share and revenue of $253.65 billion, which would represent changes of -16.05% and -16.49%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for BP. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 remained stagnant. BP is currently a Zacks Rank #3 (Hold).

Digging into valuation, BP currently has a Forward P/E ratio of 13.97. This valuation marks a premium compared to its industry's average Forward P/E of 11.75.

It is also worth noting that BP currently has a PEG ratio of 1.97. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Oil and Gas - Integrated - International stocks are, on average, holding a PEG ratio of 1.47 based on yesterday's closing prices.

The Oil and Gas - Integrated - International industry is part of the Oils-Energy sector. This group has a Zacks Industry Rank of 98, putting it in the top 39% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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