Now trading at a price of $35.3, BP p.l.c. has moved 1.4% so far today.
BP p.l.c. returned gains of 21.3% last year, with its stock price reaching a high of $41.38 and a low of $25.37. Over the same period, the stock outperformed the S&P 500 index by 10.0%. More recently, the company's 50-day average price was $36.82. BP p.l.c. provides carbon products and services. The company operates through Gas & Low Carbon Energy, Oil Production & Operations, and Customers & Products segments. Based in London, United Kingdom, the large-cap Energy company has 67,600 full time employees. BP p.l.c. has offered a 0.7% dividend yield over the last 12 months.
The Company's Revenues Are Declining:
| 2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
|---|---|---|---|---|
| Revenue (MM) | $278,397 | $105,944 | $157,739 | $241,392 |
| Gross Margins | 9.9% | 9.6% | 14.5% | 22.8% |
| Operating Margins | 5.6% | -0.5% | 6.7% | 17.0% |
| Net Margins | 1.45% | -19.17% | 4.8% | -1.03% |
| Net Income (MM) | $4,026 | -$20,305 | $7,565 | -$2,487 |
| Net Interest Expense (MM) | -2,783 | -2,485 | -2,274 | -1,531 |
| Net Interest Expense (MM) | -$2,783 | -$2,485 | -$2,274 | -$1,531 |
| Depreciation & Amort. (MM) | -$18,411 | -$14,889 | -$14,972 | -$14,703 |
| Earnings Per Share | $1.18 | -$6.03 | $2.24 | $8.18 |
| EPS Growth | n/a | -611.02% | 137.15% | 265.18% |
| Diluted Shares (MM) | 3,400 | 3,370 | 3,377 | 11,641 |
| Free Cash Flow (MM) | $10,352 | -$144 | $12,725 | $28,863 |
| Capital Expenditures (MM) | -$15,418 | -$12,306 | -$10,887 | -$12,069 |
| Net Current Assets (MM) | -$112,427 | -$109,104 | -$104,243 | -$97,442 |
| Current Ratio | 1.12 | 1.22 | 1.15 | 1.09 |
| Long Term Debt (MM) | $57,237 | $63,305 | $55,619 | $43,746 |
| Net Debt / EBITDA | 1.62 | -6.4 | 1.02 | 0.65 |
BP p.l.c. has exceptional EPS growth, low leverage, and generally positive cash flows. However, BP p.l.c. has declining revenues and decreasing reinvestment in the business, slimmer gross margins than its peers, and weak operating margins with a positive growth rate. Finally, we note that BP p.l.c. has just enough current assets to cover current liabilities.
A Very Low P/E Ratio but Trades Above Its Graham Number:
BP p.l.c. has a trailing twelve month P/E ratio of 4.5, compared to an average of 7.54 for the Energy sector. Based on its EPS guidance of $5.67, the company has a forward P/E ratio of 6.5. According to the 36.9% compound average growth rate of BP p.l.c.'s historical and projected earnings per share, the company's PEG ratio is 0.12. Taking the weighted average of the company's EPS CAGR and the broader market's 5-year projected EPS growth rate, we obtain a normalized growth rate of 11.0%. On this basis, the company's PEG ratio is 0.41. This suggests that its shares are undervalued. In contrast, BP p.l.c. is likely overvalued compared to the book value of its equity, since its P/B ratio of 5.87 is higher than the sector average of 1.68. The company's shares are currently trading 157.3% above their Graham number. Ultimately, BP p.l.c.'s strong cash flows, decent earnings multiple, and healthy debt levels factor towards it being fairly valued, its elevated P/B ratio notwithstanding.
BP p.l.c. Has an Analyst Consensus of Strong Upside Potential:
The 13 analysts following BP p.l.c. have set target prices ranging from $39.3 to $52.0 per share, for an average of $44.3 with a buy rating. As of April 2023, the company is trading -16.9% away from its average target price, indicating that there is an analyst consensus of strong upside potential.
The largest shareholder is State Street Corporation, whose 1% stake in the company is worth $802,332,288.
