BP’s Stock Performance Has Risen 17% Since Mid-February 2016
Is BP's Upstream Portfolio Poised for Growth?
Integrated stocks recuperate in 2016
In 2015, falling oil prices affected the upstream earnings of integrated energy companies. This was duly reflected in their stock price performances. The trend continued into January 2016.
However, in February 2016, integrated energy stocks started rising. This was due to spikes in oil prices led by the efforts of oil producers to support prices. Since February 11, 2016, BP (BP) has seen its stock rise by 17% amid volatility.
BP’s peers PetroChina (PTR) and Statoil (STO) have risen by 22% and 28%, respectively, during the same period. YPF (YPF) has risen even more sharply by 37%.
For exposure to the integrated energy sector, you can consider the Vanguard Energy ETF (VDE). The ETF has ~36% exposure to integrated energy sector stocks.
BP’s stock performance
Last year, BP’s stock fell, led by plunging oil prices. Continuing the trend, BP’s stock had a weak opening in 2016. BP traded below its 50-day and 200-day moving averages at the beginning of the year. BP’s downward movement halted in mid-February, when the stock started rising due to firming oil prices.
During the same period, BP’s stock, amid volatility, crossed above its 50-day moving average twice. Currently, BP is trading above its 50-day moving average. However, the stock continues to trade below its 200-day moving average.
BP’s latest earnings review
BP reported a loss of $583 million in 1Q16. This translated into a URC (underlying replacement cost) profit of $532 million in 1Q16 compared to $2.6 billion in 1Q15. BP’s fall in URC EBIT (earnings before interest and tax) was on account of its losses in its upstream segment, which were partly offset by earnings in its downstream segment.
We’ll discuss BP’s segment-by-segment performance in the next article. BP also reported a URC profit of $0.17 in its earnings per share.
In the next article, we’ll discuss BP’s strategy along with how analysts rate the company’s stock.
Browse this series on Market Realist: