BP PLC Stock Hold Recommendation Reiterated (BP)

NEW YORK ( TheStreet) -- BP (NYSE: BP) 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 generally poor debt management.

Highlights from the ratings report include:
  • BP's revenue growth has slightly outpaced the industry average of 6.6%. 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 company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, BP PLC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • 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 significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. 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 5.2, below the average energy industry P/E ratio of 7.7and below the S&P 500 P/E ratio of 17.7. BP has a market cap of $133.93 billion and is part of the basic materials sector and energy industry. Shares are down 1.2% year to date as of the close of trading on Friday.

You can view the full BP Ratings Report or get investment ideas from our investment research center.

--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.
null

If you liked this article you might like

Roku, Nucana and Other IPOs That Should Be on Your Radar in 2017

Time to Play Equifax?

Energy M&A Weekly: More Midstream IPOs Expected in 2017

Time to Play Equifax?

Here's Where Wall Street Stands