BP Stock Lower, Price Target Boosted at Canaccord

BP's price target was raised this morning at Canaccord due to 'attractive' conditions for major oil companies.
By Natalie Walters ,

NEW YORK (TheStreet) -- Shares of BP (BP) - Get Report are lower by 0.61% to $35.79 in late morning trading as the company's price target was raised today to $6.77 from $5.58 at Canaccord

Additionally, the firm maintained its "buy" rating on the London-based oil and gas company.  

The price increase is due to increasingly "attractive conditions" for the major oil companies, according to an analyst note: "Financing costs are low, smaller competitors are in large part finding funding markets closed to them, supply chain costs have dropped and are still falling, and the oil price has risen to a level consistent with stability in free cash flow." 

Three rumors about BP - "that it cannot cut costs further, that it has no growth beyond 2020, and that its new production is no more profitable than its existing base," - were proven false during a visit to the BP Azerbaijan site in June, according to Canaccord. 

The firm is convinced BP can grow production in the next 3-4 years, and that post-2020 growth will be seen in Azerbaijan, Egypt, Russia, Oman, and in its U.S. L48 business.

"We believe BP is solidly placed to take advantage of current conditions," the firm wrote. 

Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:

We rate BP PLC as a Hold with a ratings score of C. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, poor profit margins and disappointing return on equity.

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