BP Stock Rises Today as Oil Prices Rally

NEW YORK (TheStreet) -- Shares of BP  (BP) rose 4.64% to $37.42 in afternoon trading Wednesday as oil prices recovered.

Brent crude hit an intraday low of $58.71 a barrel on London's ICE Futures exchange, according to the Wall Street Journal. But Brent rallied to 4.55% to $62.74 at 12:36 p.m., according to CNBC.

Oil prices have plummeted nearly 50% since the summer amid a global oversupply. Oil producers are continuing to increase production despite the supply glut and weakening demand.

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The American Petroleum Institute published data late Tuesday that indicated a surprise 1.9 million barrel rise in weekly U.S. oil stockpiles. The U.S. Energy Information Administration is scheduled to publish stockpile data on Wednesday.

Separately, TheStreet Ratings team rates BP PLC as a "hold" with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

"We rate BP PLC (BP) a HOLD. 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 reasonable valuation levels, 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, disappointing return on equity and poor profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Net operating cash flow has increased to $9,399.00 million or 48.43% when compared to the same quarter last year. In addition, BP PLC has also vastly surpassed the industry average cash flow growth rate of -1.58%.
  • The current debt-to-equity ratio, 0.43, 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 0.98 is somewhat weak and could be cause for future problems.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, BP PLC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • The gross profit margin for BP PLC is currently extremely low, coming in at 11.86%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.37% trails that of the industry average.
  • You can view the full analysis from the report here: BP Ratings Report

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