BP Inc(BP:NYE, BP:LSE) Kepler maintains Buy rating and cuts target to 385 GBX

STA Research
by: STA Research

Kepler Cheuvreux today cut their target on BP to 385GBX from 400GBX, and maintained their Buy rating.

The target cut comes on the back of a terrible earnings report which showed quarterly revenue was cut in half from the previous quarter.  Oil prices are so depressed that at these levels it is very difficult for BP to turn a profit as the pandemic is causing demand to evaporate.  BP is one of the stronger firms in the sector and over the long haul should be able to meet the the demands of this challenging industry and come through the other side, unlike some of it’s peers in the space.

 

STA Research(stocktargetadvisor) has a average target of 382.50GBX on the stock, and a consensus Buy rating.  STA’s view of the stock is Slightly Bearish with a score of 3.6 out of 10, where 0 is very bearish and 10 very bullish.

What to like:
Superior capital utilization
The company management has delivered better return on invested capital in the most recent 4 quarters than its peers, placing it in the top quartile.
Positive cash flow
The company had positive total cash flow in the most recent four quarters.
Positive free cash flow
The company had positive total free cash flow in the most recent four quarters.
Superior Earnings Growth
This stock has shown top quartile earnings growth in the previous 5 years compared to its sector.

 

What to not like:
Low market capitalization
This is among the smaller entities in its sectors with below median market capitalization. That may make it less stable in the long run unless it has a unique
technology or market which can help it grow or get acquired in future.
Overpriced compared to earnings
The stock is trading high compared to its peers on a price to earning basis and is above the sector median.
Overpriced compared to book value
The stock is trading high compared to its peers median on a price to book value basis.
Overpriced on cashflow basis
The stock is trading high compared to its peers on a price to cash flow basis. It is priced above the median for its sectors. Proceed with caution if you are considering to buy.
Highly leveraged
The company is in the bottom half compared to its sector peers on debt to equity and is highly leveraged. However, do check the news and look at its sector and management statements. Sometimes this is high because the company is trying to grow aggressively.
Overpriced on free cash flow basis
The stock is trading high compared to its peers on a price to free cash flow basis. It is priced above the median for its sectors. Proceed with caution if you are considering to buy.
Low Revenue Growth
This stock has shown below median revenue growth in the previous 5 years compared to its sector

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2 thoughts on “BP Inc(BP:NYE, BP:LSE) Kepler maintains Buy rating and cuts target to 385 GBX”

  1. Wishful thinking, at best! Many investors have been sabotaged. This “cultural adjustment” is equivalent to a bully in the playground, creaming everybody at tether ball and then deciding the next week that tiddly winks might be a better match for his talents.

    1. Correct, the world is at a pivot point, when everybody finally realizes the middle class have been wiped out and the elite are in control. Markets are rigged to the upper echelon.

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