Started by analysis.hotforex.com, forexegitimkitabi.com, binaryoptiontrader.info, Feb 07, 2022, 02:51 pm
0 Members and 1 Guest are viewing this topic.
BP plc(#BP), one of the six largest oil companies in the world with current market capitalization worth $107.77B, is set to report its earnings for the fiscal Quarter ending Dec 2021, on 8th February (Tuesday) before market open.
Fig.1：:Daily Demand for Crude Oil Worldwide (in million barrels per day), with a forecast until 2026.Source： Statista
In the bigger picture outlook, as economies gradually recover from the pandemic downfall, consensus for global oil demand remains positive. By the end of 2022 and 2023, daily demand is expected to hit 99.4 million barrels and 101.2 million barrels respectively, with the latter a return to pre pandemic levels. On the other hand, despite a recent announcement from OPEC+ to increase production modestly, some members who have consistently failed in ramping up production by its stated target, plus elevated geopolitical tensions, have further contributed to the rise in oil price.
Fig.2：: Comparison Chart: Energy Sector SPDR Fund (XLE) and BP plc. Source: Yahoo Finance
Historically, there is positive correlation between the Energy Select Sector SPDR ETF and BP plc (and most other oil companies). Thus, the share price of the company is likely to be continuously buoyed by recent oil prices which remain at a relatively higher level. Nevertheless, development of Covid-19 variants remains an underlying risk, as "Omicron won't be the last variant of concern", and it could be "just the beginning of a more transmissible, more virulent virus that could do even more harm than it has already". If that's the case, the oil sector could inevitably be negatively affected.
Fig 3：Reported Sales and EPS versus Analyst Forecast for BP plc. Source: money.cnn
In the upcoming Q4 report, consensus estimates for sales stand at $52.8B, up over 39% (q/q) and 8% (y/y) respectively. EPS is expected to rise more than 17% from the previous quarter to $1.16. In the fourth quarter last year, the company's EPS was only $0.03. Polled investment analysts remain optimistic towards BP plc as the company has been generating strong underlying earnings and cash flow, while maintaining focus on strategic transformation, safe and reliable operations. In the previous quarter, the company announced share repurchase worth $1.25B and dividend at $5.46 cents/share payable, reflecting its healthy financial position. It is also worth noting that BP has committed to expanding its renewables portfolios, which may help the company advance the energy transition ahead of its peers, to generate good value in the long term.
Technically, #BP remains traded within an ascending wedge after rebounding from the lowest point 1.3442 seen on 18th November 2020. As of its close on 4th February, the #BP share price has risen two fold, at 4.0530. The upper trend line of the ascending wedge serves as an immediate resistance, followed by 4.2403 (FR 61.8%, also near two-year high), 4.6500 and 5.0276 (FR 78.6%). On the contrary, failure to break above current resistance may indicate the possibility for the company's share price to undergo bearish pressure, towards 3.6874 (FR 50.0%), 100-SMA, and 3.1344 (FR 38.2%, which also forms a confluence with bottom trend line of the wedge).
Click here to access our Economic Calendar
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Page created in 0.400 seconds with 15 queries.