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Zacks #1 Stocks on the Move 05/17/2013

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BP, Plc (BP)

by Zacks Equity Research

July 17, 2012 | Comments : 0 Recommended this article: (0)
BP

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

We are downgrading our recommendation on BP Plc (BP) to Underperform from Neutral. The company saw lackluster performance in both Upstream and Downstream segments in the most recent quarter. In particular, the Gulf of Mexico drilling moratorium of 2010 is still hurting BP's production, which registered a 6% year-over-year decline.

The company's guidance of lower production and higher costs for the upcoming quarter also keeps us wary. Output for 2012 is likely to be on par with 2011 levels. Additionally, BP faces headwinds from a number of global macro issues, which include sovereign debt risks, defaults on sovereign credits and changes in U.S. monetary, fiscal and tax policies.

Based on the above mentioned headwinds, we are downgrading our recommendation on BP. Our $37 target price represents 6.3x 2012 EPADS.

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