NEW YORK (TheStreet) -- Shares of BP Plc (BP) are 1.22% to $51.53 after the company said today that it will ask the U.S. Supreme Court to review a court ruling related to the 2010 Gulf of Mexico oil spill, which forces the company to pay some businesses for economic damages without the businesses having to prove the spill caused their losses, Reuters reports.
In New Orleans on Monday, the 5th U.S. Circuit Court of Appeals wouldn't change a March ruling from a three-judge panel over how businesses would be paid.
BP has said paying such claims could push the estimated $9.2 billion cost of its settlement with those businesses much higher. The company said it would ask the 5th Circuit not to require it to make payments while it appeals.
TheStreet Ratings team rates BP PLC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate BP PLC (BP) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, good cash flow from operations, solid stock price performance and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has significantly increased by 107.48% to $8,231.00 million when compared to the same quarter last year. In addition, BP PLC has also vastly surpassed the industry average cash flow growth rate of 18.91%.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- The current debt-to-equity ratio, 0.41, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.93 is somewhat weak and could be cause for future problems.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 3.3%. Since the same quarter one year prior, revenues slightly dropped by 2.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- You can view the full analysis from the report here: BP Ratings Report