BP Stock Drops Along With Oil Prices

NEW YORK (TheStreet) -- BP (BP) shares declined 1.62% to $41.81 in intraday trading on Thursday as falling oil prices took their toll on the oil sector today.

Industry standard Brent crude for June delivery is down 3.28%, or $2.22, to $65.55 per barrel, while U.S. West Texas crude is down 3.3%, or $2.01, to $58.92 per barrel. The fall in prices comes one session after oil prices rose to five month highs yesterday.

Oil prices are declining as the dollar strengthened against foreign currencies today following the release of last weeks jobless benefit claims numbers. Claims rose by just 3,000 to seasonally adjusted number of 265,000, slightly above 262,000 claims that represents a 15 year low.

TheStreet Ratings team rates BP PLC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate BP PLC (BP) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

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

  • Net operating cash flow has increased to $7,247.00 million or 33.85% when compared to the same quarter last year. In addition, BP PLC has also vastly surpassed the industry average cash flow growth rate of -42.26%.
  • The current debt-to-equity ratio, 0.47, 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.
  • Despite the weak revenue results, BP has outperformed against the industry average of 33.1%. Since the same quarter one year prior, revenues fell by 21.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • BP PLC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, BP PLC reported lower earnings of $1.21 versus $7.34 in the prior year. This year, the market expects an improvement in earnings ($2.17 versus $1.21).
  • 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 significantly decreased by 522.9% when compared to the same quarter one year ago, falling from $1,042.00 million to -$4,407.00 million.
  • You can view the full analysis from the report here: BP Ratings Report
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