D-Wave Quantum falls nearly 3% as earnings miss overshadows revenue beat
On Thursday, Bernstein analysts maintained a positive outlook on BP Plc. (NYSE:BP:LN) (NYSE: BP), reiterating an Outperform rating and a price target of GBP5.70. The company outlined a new strategic direction, which was announced prior to its Capital Markets Day at 13:00. According to InvestingPro data, BP currently appears undervalued, with the stock trading at $32.68 and showing relatively low price volatility. Bernstein’s analysis indicates that BP has adapted to market feedback and unveiled a strategic plan that aligns with the economic landscape and positions it comparably to its peers.
The revised strategy involves a reduction in overall capital expenditure guidance, with a reallocation of funds to oil and gas projects, which are expected to yield the highest returns. As a prominent player in the Oil, Gas & Consumable Fuels industry, BP aims to increase oil and gas production by 2030 and has plans to further expand volumes by 2035. This includes a commitment to replenishing its reserves. The company’s financial health appears solid, with InvestingPro data showing a healthy current ratio of 1.25 and moderate debt levels.
In a significant shift, BP has also announced a cut in its transition engine capital expenditure, reducing it from $7 billion per annum to a range of $1.5 billion to $2 billion per annum. This budget will cover convenience retail and a focus on biogas, biofuels, and electric vehicle (EV) charging infrastructure. The company has decided to concentrate less on carbon capture and storage (CCS) and hydrogen, allocating only $800 million per annum to genuine low carbon initiatives.
The analyst’s commentary highlighted the company’s strategic pivot back to its core oil and gas operations to drive a 20% compound annual growth rate in free cash flow. By reallocating capital more effectively and reducing investment in transition engines, BP is positioning itself to adapt to the current economic environment while still maintaining a presence in the low carbon sector through selected investments.
The announcement comes at a time when energy companies are balancing the need to produce strong financial returns with the global push towards a lower carbon future. BP’s strategy reflects an integrated approach to managing its portfolio, with a focus on profitability and sustainability.
Investors will likely watch closely as BP implements its new strategy, which aims to deliver growth in the traditional energy sector while also making targeted investments in the transition towards a greener economy. The company has maintained dividend payments for 34 consecutive years, with a current dividend yield of 5.81%. InvestingPro subscribers have access to over 10 additional exclusive insights about BP, including detailed analysis of its financial health metrics and growth potential. A comprehensive Pro Research Report is available for deeper analysis of BP’s market position and future prospects.
In other recent news, BP Plc reported several significant developments. Analysts from JPMorgan upgraded BP’s stock rating from Underweight to Neutral, raising the price target to £5.10, citing the potential value of BP’s stake in Rosneft and the company’s modest exposure to volatile gas markets. Meanwhile, BP and Reliance Industries (NSE:RELI) lost a decade-long gas drilling dispute in India, with the Delhi High Court ruling against them for unlawfully extracting natural gas from a neighboring offshore block. Activist investor Elliott Capital Management has acquired a nearly 5% stake in BP, urging the company to consider a substantial divestment program while supporting its current strategy. Bernstein analysts reiterated an Outperform rating for BP, maintaining a price target of GBP5.70, following BP’s announcement of a strategic overhaul focusing more on oil and gas. UBS also raised BP’s price target to GBP5.25, maintaining a Buy rating, as the company is expected to announce a strategic overhaul at its upcoming Capital Markets Day. These recent developments indicate ongoing strategic shifts and legal challenges for BP, which are closely monitored by investors and analysts.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.