BP (BP, $23.47) posts Q2 loss, announces cost reduction plans and dividend cut
BP posted a second-quarter loss and announced halving of its quarterly dividend. However, the energy company also announced plans on cost cutting and a drive to go green.
The London-based company’s second-quarter underlying replacement cost profit, which it uses as a proxy for its net earnings, came in at a record loss of -$6.7 billion for the second quarter. It raked a net profit of $800 million in the first quarter.
BP’s reported loss for the quarter was -$16.8 billion, which included a post-tax charge of $10.9 billion for non-operating items. That figure included $9.2 billion in impairment charges, mainly reflecting BP’s revised forecast for oil and gas prices over the next 30 years, and $1.7 billion of exploration write-offs.
Coronavirus pandemic, which severely hurt demand for energy in the second quarter, propelled BP to focus on a plan to reduce its oil and gas output by 40% and increase investments in renewable energy over the next decade.
The company lowered its forecast for Brent crude to $55 a barrel over the next 30 years, compared to its prior forecast of $70 a barrel.
BP also announced that it slashed its dividend to 5.25 cents a share from 10.5 cents a share for the first quarter. BP also announced plans to cut 10,000 global positions, which it expects will be a “significant” contribution to its plan of $2.5 billion reduction in annual cash costs by the end of 2021.
According to Tickeron, BP in Downtrend: Stochastic indicator remains in oversold zone for 4 days
The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an uptrend is expected.
Current price $23.48 crossed the support line at $23.43 and is trading between $24.09 resistance and $23.43 support lines. Throughout the month of 07/01/20 - 08/03/20, the price experienced a -5% Downtrend. During the week of 07/27/20 - 08/03/20, the stock fell -5%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The lower Bollinger Band was broken -- a price increase is expected as the ticker heads toward the middle band, which indicates a buy or call consideration for traders. In 14 of 34 cases where BP's price broke its lower Bollinger Band, its price rose further in the following month. The odds of a continued Uptrend are 41%.
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on July 28, 2020. Traders may consider selling the ticker, shorting the ticker, or exploring put options. In 36 of 88 cases where BP's Momentum Indicator fell below the 0 level, its price fell further within the subsequent month. The odds of a continued Downtrend are 41%.
The Moving Average Convergence Divergence (MACD) crossed below the signal line. In 25 of 45 cases where BP's MACD histogram became negative, the price fell further within the following month. The odds of a continued Downtrend are 56%.
The price moved below its 50-day Moving Average, which indicates a reversal from an Uptrend to a Downtrend. In 20 of 40 cases where BP's price crossed below its 50-day Moving Average, its price fell further within the subsequent month. The odds of a continued Downtrend are 50%.
The Aroon Indicator entered a Downtrend today. In 89 of 212 cases where BP Aroon's Indicator entered a Downtrend, the price fell further within the following month. The odds of a continued Downtrend are 42%.
Fundamental Analysis (Ratings)
Tickeron has a negative outlook on this ticker and predicts a further decline by more than 4.00% within the next month with a likelihood of 58%. During the last month, the daily ratio of advancing to declining volumes was 1 to 1.03.
The Tickeron Valuation Rating of 15 (best 1 - 100 worst) indicates that the company is slightly undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (0.76) is normal, around the industry mean (1.04). P/E Ratio (18.36) is within average values for comparable stocks, (17.98). Projected Growth (PEG Ratio) (0.64) is also within normal values, averaging (1.97). Dividend Yield (6.51) settles around the average of (7.40) among similar stocks. P/S Ratio (0.46) is also within normal values, averaging (1.33).
The Tickeron SMR rating for this company is 30 (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron PE Growth Rating for this company is 36 (best 1 - 100 worst), pointing to consistent earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Price Growth Rating for this company is 80 (best 1 - 100 worst), indicating slightly worse than average price growth. BP’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. BP’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 98, placing this stock worse than average.
BP sees MACD Histogram just turned negative
BP saw its Moving Average Convergence Divergence Histogram (MACD) turn negative on October 15, 2024. This is a bearish signal that suggests the stock could decline going forward. Tickeron's A.I.dvisor looked at 43 instances where the indicator turned negative. In of the 43 cases the stock moved lower in the days that followed. This puts the odds of a downward move at .
Technical Analysis (Indicators)
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on October 15, 2024. You may want to consider selling the stock, shorting the stock, or exploring put options on BP as a result. In of 87 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
BP moved below its 50-day moving average on October 08, 2024 date and that indicates a change from an upward trend to a downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where BP declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Aroon Indicator for BP entered a downward trend on October 07, 2024. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Bullish Trend Analysis
The RSI Indicator points to a transition from a downward trend to an upward trend -- in cases where BP's RSI Indicator exited the oversold zone, of 29 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. of 62 cases where BP's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where BP advanced for three days, in of 307 cases, the price rose further within the following month. The odds of a continued upward trend are .
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Seasonality Score of (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating slightly weaker than average sales and a marginally profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating slightly worse than average price growth. BP’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. BP’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 68, placing this stock worse than average.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.520) is normal, around the industry mean (1.194). P/E Ratio (7.366) is within average values for comparable stocks, (24.146). BP's Projected Growth (PEG Ratio) (13.379) is slightly higher than the industry average of (4.841). Dividend Yield (0.045) settles around the average of (0.111) among similar stocks. P/S Ratio (0.534) is also within normal values, averaging (0.975).
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General Information
a producer of petroleum, natural gas and related products
Industry IntegratedOil