Low oil prices can be great for energy consumers. But they are not so good for Bishop (LSE: bp.) Price of shares. He fell by 4% in early trade on Tuesday (April 29) in the results of Q1.
The oil giant recorded a 49% decrease in profits from year to year. Operational cash flows fell by 28%because BP omitted estimates.
It looks like it was a challenging district. But the CEO of Murray Auchincloss described it as “significant progress” IN “fundamental reset of our strategy. “
Concentrate on oil again
BP is in a period of grave changes, because it turns away from low coal, which was not a screaming success for the price of the action.
“We had the highest operational performance in history. Our refineries in the first quarter were the best they have been led for 24 years“Said CNBC and talked about three major recent projects and six exploration discoveries.
We look at the forecast of the year -round dividend profitability of 6.7%. And the company announced a Q1 dividend in the amount of eight cents per share. In the previous quarter there is a recent redemption of shares worth USD 0.75 billion, a significant decrease from USD 1.75 billion.
It still makes the cash situation in BP seem well enough. But I’m not a bit concerned that the net debt increases to USD 27 billion. At the end of 2024, USD 23 fell slightly. This is about 35% of the company’s market capitalization.
All changes
These are very uncertain times and we really do not know how the renovated BP strategy will go on classic sources of hydrocarbon energy. How to emphasize that there is no return, the company said that Giulia Chierchia, responsible for the activities in the field of sustainable energy, will leave in June and will not be replaced.
The sale plans are accelerating, and this year will be removed in USD 3 billion to USD 4 billion. By the end of 2027, BP believes that the sale of sale should lend a hand reduce net debt to USD 14 billion to USD 18 billion. It would make one of my fears easier if it happened as planned.
BP also stands in the face of pressure from the Hedge Fund of activists Elliott, who believes that operations in Great Britain are the highest. Elliott supposedly wants to see how poorly developing parts of the company are dropped, such as its venture capital arm. The Fund controls over 5% of BP shares.
What to do about it
The forecasts are a price -profit ratio of 10, falling by up to 7.5 to 2027. It looks low-cost. Return to “old old oil” will certainly provide many investors with confidence in the growing valuation in the next few years.
But then analysts suggest that oil can remain at USD 60 in 2025 and 2026. This is on the back of OPEC+ relaxing their production limitations, while other countries also turn on taps. And the long -term life of fossil fuels still remains a problem, regardless of the current political mood.
This is too risky for me. But for investors who can deal with it, a time of uncertainty and pessimism can sometimes be considered to consider the purchase.
