Bishop (LSE: BP) Actions fell by 10% compared to their 12 February annual trade in the highest level of £ 4.71. The price movement was commonly followed by the Brenty Brent Oil Price pattern. This means that nothing about the added value that BP does is not reflected in the market assessment. This includes refined products with a high margin, production of petrochemicals and various trade operations.

Once again, he emphasizes the discrepancy between the price of the action and its value. The first one is simply regardless of what the market will pay for any action at the moment. However, the latter reflects the full scope of the company’s operations and an augment in earnings.

And ultimately, this augment in profits supply the price of each company and dividends in time. By using the latter, the fair value for each company can be indicated.

Earning growth prospects

The risk of BP earnings is all environmental rainfall from its drilling operations. This can be very exorbitant to repair and damage its reputation. Such events took place earlier and other energy companies. Another risk is the further augment in taxes by the UK government, which directly absorbs profits.

To say, the forecasts of consensus analysts are that BP earnings will grow by 28.3% each year by the end of 2027.

It is expected that a lot of this is due to the re-energization of BP of its basic activities for the search and development of crude oil and gas. This was the attitude towards strategic strategic reset on February 26 to focus more on oil and gas, and less on expenses on energy sources. The designated goal is to augment cash flow and shareholders.

To this end, the company has announced several huge fresh oil and gas projects. On August 6, he received a contract worth USD 109 million (80.7 million GBP) to examine the possibilities in Egypt. It has about 3.3 billion barrels of proven crude oil reserves and about 78 -trunts of gas. This makes it one of the key oil and gas producers in Africa and the eastern region of the Mediterranean.

On August 4, he announced his greatest discovery of oil and gas for 25 years – “Bumerangue” in the Brazilian Santos pool. BP was not given any specific number of reserves, but he stated that this is probably its biggest find since “Shah Deniz” in 1999. This place of the Caspian Sea was initially 1tr -cubic meters of gas and 2 billion condensate barrels.

The company also goes with great field development in the Gulf of Mexican and Iraq. His fields in the first contain about 10 billion barrels of oil and in the second about 9 billion barrels.

Fair value and share dividend performance

I discovered that the analysis of discounting cash flows is the best way to determine the fair value of the action. This clearly determines where it should trade in the price of any company shares, based on cash flow forecasts for basic activities.

In the case of BP, the shares are 52% underestimated at their current price of 4.23 GBP.

Therefore, their fair value is 8.81 £.

I think that his forceful augment in earnings with time powers shares to this level.

I also think that this will also cause higher dividend results. Indeed, the forecast of consensus analysts is that it will augment from the current 5.8% to 6.1% next year and 6.3% in 2027.

Given these factors, I will soon buy more shares.