What will the UK election mean for the BP share price?
The oil and gas major will see increased volatility after the UK election, with a Tory victory supporting the sector, though a stronger pound will weigh on internationally-focused firms like BP.
BP shares are likely to be torn post-election, with the company seeing both benefits and drawbacks in each potential scenario, according to Senior Market Analyst at IG Josh Mahony.
A conservative-led government will likely remain relatively supportive to the oil and gas sector, keeping business taxes steady and raising confidence in the market, he said.
However, a strong pound would likely ensue, bringing potential weakness for internationally-focused firms like BP.
Conversely, the benefit of a weak pound in the scenario of a Labour-led government could be limited for companies in the sector, with Corbyn planning to specifically hit the industry alongside a wider strategy to raise business taxes across the board.
‘Ultimately, any sterling devaluation in the case of a Labour government could be short-lived given the likeliness of a second referendum, and thus a Corbyn government would likely be seen as a negative for BP,’ Mahony added.
BP is trading at 464p a share as of 11:30 GMT on Thursday.
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MainFirst initiates coverage of BP with upbeat price target
Analysts at MainFirst initiated coverage of BP in December with a ‘outperform’ rating and a price target of 620p.
JP Morgan reiterated its ‘overweight’ rating for the stock and downgraded its price target for BP to 600p.
Based on BP trading at 464p the two banks believe the stock has a potential upside of between 29.3% - 33.6%.
You can go long or short BP with IG using derivatives like CFDs.
Incoming BP Boss sells £8 million in shares
New BP boss Bernard Looney sold £7.8 million worth of shares prior to taking over as the oil and gas company’s new CEO, according to a recent report by This is Money.
Looney sold down his stake in the company over two sales that took place in February and April – six months before BP publicly announced his appointment, the report said.
It is common for incoming executives to buy up shares to reach the statutory minimum of a holding worth five times their salary, the report added.
‘I am humbled by the responsibility that is being entrusted to me by the Board and am truly excited about both the role and BP’s future,’ Looney said following his appointment.
‘Our company has amazing people, tremendous assets, and a set of core values that guide our actions, but most of all we have a desire to be better.’
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