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Reasons Why Hold Strategy is Apt for BP Stock Right Now
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BP plc (BP - Free Report) has witnessed upward earnings estimate revisions for 2022 and 2023 in the past 30 days. The stock, carrying a Zacks Rank #3 (Hold), is likely to see earnings growth of 76.9% this year.
What's Favoring the Stock?
The price of West Texas Intermediate (WTI) crude is trading higher than the $115-per-barrel mark, marking a massive improvement in the past year. The commodity’s price is likely to rise in the coming days since there has been a disruption in the energy market owing to sanctions on Russia following the prolonged Ukraine war.
The oil price positive trajectory is a boon for BP’s upstream operations. The improving oil price scenario and decent daily oil equivalent production volumes, which the firm expects to remain flat year over year in 2022, are aiding the energy giant’s bottom line. BP added that the target of adding a net production of 900 thousand barrels of oil equivalent per day by 2021 from key new projects has been delivered successfully.
BP is expected to gain from the refining business as well. The integrated energy player has a significant portion of its refining capacities in the United States. In the country, BP operates feedstock-advantaged and sophisticated refineries. The refineries are connected to strong logistics and fuel infrastructure. Thus, with a considerable presence in the United States, the energy major is well placed to capitalize on the rising fuel demand, backed by the reopening of the economy and wider distribution of vaccines.
BP is strongly focused on returning capital to shareholders. BP announced plans to execute a $2.5-billion share buyback, which is expected to be completed before reporting the second-quarter results. The company anticipates buying back $4 billion worth of shares every year, considering Brent crude price at $60 per barrel.
Risks
BP has significant exposure to debt capital. Compared to composite stocks belonging to the industry with debt to capitalization of 27.2%, the metric for BP is significantly higher at 43.6%.
Antero Resources is a leading upstream energy player with a strong presence in the gas-rich prolific Appalachian Basin in West Virginia and Ohio. In the past 60 days, Antero Resources has witnessed upward earnings estimate revisions for 2022 and 2023.
The substantial exposure to improving commodity price is a huge positive for Antero Resources.
Comstock is a well-known name in the upstream space, with operations across the gas-rich Haynesville shale in North Louisiana and East Texas. The substantial exposure to improving commodity price is a huge positive for Comstock.
In the past 30 days, Comstock has witnessed upward earnings estimate revisions for 2022 and 2023.
Favorable commodity prices are also a huge positive for Southwestern Energy since it is a leading natural gas producer in the United States. In the past 30 days, Southwestern Energy has witnessed upward earnings estimate revisions for 2022 and 2023.
For this year, Southwestern Energy is likely to see earnings growth of 46.7%.
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Reasons Why Hold Strategy is Apt for BP Stock Right Now
BP plc (BP - Free Report) has witnessed upward earnings estimate revisions for 2022 and 2023 in the past 30 days. The stock, carrying a Zacks Rank #3 (Hold), is likely to see earnings growth of 76.9% this year.
What's Favoring the Stock?
The price of West Texas Intermediate (WTI) crude is trading higher than the $115-per-barrel mark, marking a massive improvement in the past year. The commodity’s price is likely to rise in the coming days since there has been a disruption in the energy market owing to sanctions on Russia following the prolonged Ukraine war.
The oil price positive trajectory is a boon for BP’s upstream operations. The improving oil price scenario and decent daily oil equivalent production volumes, which the firm expects to remain flat year over year in 2022, are aiding the energy giant’s bottom line. BP added that the target of adding a net production of 900 thousand barrels of oil equivalent per day by 2021 from key new projects has been delivered successfully.
BP is expected to gain from the refining business as well. The integrated energy player has a significant portion of its refining capacities in the United States. In the country, BP operates feedstock-advantaged and sophisticated refineries. The refineries are connected to strong logistics and fuel infrastructure. Thus, with a considerable presence in the United States, the energy major is well placed to capitalize on the rising fuel demand, backed by the reopening of the economy and wider distribution of vaccines.
BP is strongly focused on returning capital to shareholders. BP announced plans to execute a $2.5-billion share buyback, which is expected to be completed before reporting the second-quarter results. The company anticipates buying back $4 billion worth of shares every year, considering Brent crude price at $60 per barrel.
Risks
BP has significant exposure to debt capital. Compared to composite stocks belonging to the industry with debt to capitalization of 27.2%, the metric for BP is significantly higher at 43.6%.
Stocks to Consider
Better-ranked players in the energy space include Antero Resources (AR - Free Report) , Comstock Resources (CRK - Free Report) and Southwestern Energy (SWN - Free Report) . While Antero Resources and Comstock Resources sport a Zacks Rank #1 (Strong Buy), Southwestern carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Antero Resources is a leading upstream energy player with a strong presence in the gas-rich prolific Appalachian Basin in West Virginia and Ohio. In the past 60 days, Antero Resources has witnessed upward earnings estimate revisions for 2022 and 2023.
The substantial exposure to improving commodity price is a huge positive for Antero Resources.
Comstock is a well-known name in the upstream space, with operations across the gas-rich Haynesville shale in North Louisiana and East Texas. The substantial exposure to improving commodity price is a huge positive for Comstock.
In the past 30 days, Comstock has witnessed upward earnings estimate revisions for 2022 and 2023.
Favorable commodity prices are also a huge positive for Southwestern Energy since it is a leading natural gas producer in the United States. In the past 30 days, Southwestern Energy has witnessed upward earnings estimate revisions for 2022 and 2023.
For this year, Southwestern Energy is likely to see earnings growth of 46.7%.