NEW YORK (
) has been reiterated by TheStreet Ratings as a hold with a ratings score of C. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and a generally disappointing performance in the stock itself.
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Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 11.9%. Since the same quarter one year prior, revenues rose by 10.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The current debt-to-equity ratio, 0.39, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that BP's debt-to-equity ratio is low, the quick ratio, which is currently 0.68, displays a potential problem in covering short-term cash needs.
- The gross profit margin for BP PLC is currently extremely low, coming in at 14.20%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 6.30% trails that of the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry average. The net income has decreased by 18.4% when compared to the same quarter one year ago, dropping from $7,254.00 million to $5,915.00 million.
BP p.l.c. provides fuel for transportation, energy for heat and light, lubricants to engines, and petrochemicals products. The company has a P/E ratio of 4.7, below the average energy industry P/E ratio of 4.9and below the S&P 500 P/E ratio of 17.7. BP has a market cap of $119.38 billion and is part of the
industry. Shares are down 11.5% year to date as of the close of trading on Tuesday.
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--Written by a member of TheStreet Ratings Staff.
TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.