5th May 2015
The Share Centre has rated BP as a buy and says the firm is being proactive in taking action to cope with the lower oil price.
Helal Miah, investment research analyst at The Share Centre says: “As a world-leader in oil and petrochemicals, BP explores for oil and natural gas refines, markets and supplies petroleum products, generates solar energy and manufactures and markets chemicals.
“Investors will appreciate that BP has been impacted by recent lower oil prices. Although reported profits for 2014 dropped to $4bn from $23.8bn, the previous year’s figures included the large profit on disposal of TNK-BP, and there have been large asset write-downs in 2014.”
“There were fears that the first quarter 2015 profits will fall dramatically due to the lower oil price, but the diverse nature of the business helped mitigate the losses with group profits of $2.6 billion. The upstream businesses such as refining saw profits climb from $1 billion to $2.2 billion as the industry recovers following a bad few years.
He says: “The company has sold a number of assets to reinvest in higher growth opportunities. The group are being proactive in the lower oil price environment and are already looking to cut back on jobs and salary increases. Additionally, BP has a number of new projects that are soon expected to come online and contribute to production, which for 2015 is expected to be higher than 2014. For reasons such as these, we continue to recommend BP as a ‘buy’ for investors willing to take on an intermediate level of risk, whilst looking for capital growth and income.”