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BP Jumps 8.4% Month to Date: Is There More Room for Upside?

Zacks Equity Research
·2 min read

BP plc’s BP shares have jumped 8.4% month to date versus the industry’s 2.3% growth. Notably, the Zacks Rank #3 (Hold) stock is likely to see earnings growth of 201.3% in 2021.

Let’s delve into the factors behind the stock’s price appreciation.

What’s Favoring the Stock?

Although the price of West Texas Intermediate crude, currently hovering around $48 per barrel, has declined significantly from the price of more than $60 at the beginning of 2020, the commodity price has improved considerably in the past few months. With the rolling out of COVID vaccine in the United States, raising hopes for an economic rebound within the first half of next year, many analysts opine that oil price might see further recovery once millions of Americans get inoculated.

Overall, improving oil prices are definitely a boon for BP’s upstream operations. The British energy giant’s strong focus on renewables is also noteworthy since it has been a challenge for companies to provide energy, while reducing greenhouse gas emissions. Notably, BP is striving to establish itself as a net-zero emissions company by 2050. To turn this goal into reality, the energy giant has decided to lower emissions from operations related to oil and natural gas to zero. The integrated energy firm also plans to reduce carbon intensity of the energy products it sells by half to achieve the ambitious goal.

Thus, being a leader in energy transition, the British integrated energy major is poised for further upside in the days to come.

Stocks to Consider

Meanwhile, some better-ranked players in the energy space include Summit Midstream Partners, LP SMLP, DCP Midstream, LP DCP and HighPoint Resources Corporation HPR. While Summit Midstream carries a Zacks Rank #2 (Buy), DCP Midstream and HighPoint sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Summit Midstream has seen upward earnings estimate revisions for 2020 in the past seven days.

DCP Midstream has seen upward estimate revisions for 2020 earnings in the past 30 days.

HighPoint is likely to see earnings growth of 167.5% in 2020.

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Zacks Investment Research