How Will (BP) Stock Be Affected By This EPS Change?

NEW YORK (TheStreet) -- BP's (BP) full year EPS estimates were lowered to $5.07 per share from $5.32 per share by analysts at Argus Research on Monday afternoon.

The lowered guidance reflects the firm's belief that the downstream refining business will continue to falter while the company's upstream arm will continue to be a primary growth driver.

BP shares closed trading up 0.3% to $52.75 today.

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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 17.57%.
  • BP's share price has surged by 26.10% over the past year, reflecting the market's general trend, despite their weak earnings growth during the last quarter. Regarding the stock's future course, although almost any stock can fall in a broad market decline, BP should continue to move higher despite the fact that it has already enjoyed a very nice gain 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 3.2%. 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
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