BP stock lift-off after more share buy-backs
Headline profit at BP, the London listed oil giant, saw shares climb straight out of the gate today despite a big drop in underlying replacement cost profit.
This is the benchmark line in earnings used by the sector. BP saw this at $13.8 bln for 2023, a steep fall from a record $27.7bln in the previous year. But it was the increase in the pace of its share repurchases, announcing its intentions to bring in another $1.75 bln worth of shares, taking the total now to $3.5 bln of repurchases for the first half of the year. BP also announced a dividend per ordinary share of 7.27 cents for the final three months of 2023, marking a 10% increase compared to the same period in the previous year.
(AI Video Summary)
BP's profit decrease in Q4
British oil giant BP reported a significant decrease in profits for the fourth quarter of the year, but surprisingly, this news pleased investors and traders, causing the company's stock to rise. The adjusted net for the quarter was just under $3 billion, surpassing the estimated $2.75 billion. However, the underlying replacement cost profit decreased from $3.2 billion in the previous quarter and $4.8 billion in the same quarter last year, indicating a significant reduction in profits. To improve investor confidence, BP announced a $1.75 billion share buyback program for the fourth quarter, in addition to their existing buyback plans. This means the company is committed to buying back shares worth $3.5 billion for the first half of 2024. These actions had a positive impact on BP's stock price.
BP's stock
In the recent trading session, BP's stock briefly exceeded the 200-day moving average, reaching its highest intraday level since November 30. This is a good sign, indicating strong momentum, but there has been a slight decline since then. The stock's performance going forward will depend on whether it can maintain this momentum and close above the $480 mark. For technical analysts, a close above this level could suggest further potential for the stock to rise in value. However, it is the long-term direction of BP's shares that will ultimately determine the company's future performance.
Overall, BP's stock price rose in the morning session due to its better-than-expected earnings for the latest quarter. Despite the profit decrease, investors and traders reacted positively, which caused the increase in stock prices. It is important to note that trading and investing can be influenced by many factors, so it is essential to stay informed and track the company's performance over time. By doing so, investors will have a better understanding of BP's potential for growth and success in the future.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
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