Is It Too Late To Buy BP plc (LSE:BP)?
Let’s talk about the popular BP plc (LSE:BP.). The company’s shares saw a decent share price growth in the teens level on the LSE over the last few months. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Today I will analyse the most recent data on BP.’s outlook and valuation to see if the opportunity still exists. View our latest analysis for BP
What is BP. worth?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 19% below my intrinsic value, which means if you buy BP. today, you’d be paying a fair price for it. And if you believe BP.’s true value is £6.41, then there isn’t much room for the share price grow beyond what it’s currently trading. Furthermore, BP.’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. This may mean it is less likely for BP. to fall lower from natural market volatility, which suggests less opportunities to buy moving forward.
What does the future of BP. look like?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to more than double over the next couple of years, the future seems bright for BP.. It looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? It seems like the market has already priced in BP.’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at BP.? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping tabs on BP., now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for BP., which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on BP. You can find everything you need to know about BP. in the latest infographic research report. If you are no longer interested in BP, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
