imaginima/E+ via Getty Images
- BP p.l.c. (NYSE:BP) is scheduled to announce Q1 earnings results on Tuesday, May 7th, before market open.
- Occidental Petroleum (NYSE:OXY) is scheduled to announce Q1 earnings results on Tuesday, May 7th, after market close.
- The consensus EPS estimate for BP is $1.02 and the consensus revenue estimate is $56.87B.
- The consensus EPS estimate for OXY is $0.57 and the consensus revenue estimate is $6.78B.
- Over the last 2 years, BP has beaten EPS estimates 50% of the time and has beaten revenue estimates 38% of the time. Over the last 3 months, EPS estimates have seen 1 upward revision and 4 downward. Revenue estimates have seen 3 upward revisions and 0 downward.
- Over the last 2 years, OXY has beaten EPS estimates 50% of the time and has beaten revenue estimates 50% of the time. Over the last 3 months, EPS estimates have seen 1 upward revision and 15 downward. Revenue estimates have seen 1 upward revision and 3 downward.
- BP on February 6 reported a sharp drop in Q4 profits and said it would accelerate stock buybacks through the end of next year. The company beat expectations with a less than expected drop in its underlying replacement cost profit to $2.99B from $4.81B in the year-earlier quarter and $3.29B in Q3, topping $2.77B analyst consensus compiled by the company.
- OXY on February 14 reported better than expected Q4 adjusted earnings and revenues, and said it will reduce spending on U.S. shale operations to improve cash flow to pay down debt.
- BP and OXY both have a Quant rating of “HOLD“, with a rating score of 3.46 and 3.25, respectively.
- BP has an industry ranking of 9 out of 16 among integrated oil and gas stocks, while OXY is ranked 15 out of 16, as per SA’s Quant ranking.
- In 2023, BP stock rose 3% and OXY fell 1%, while the S&P 500 Energy Sector Index fell 4.8%. The benchmark S&P 500 Index rose 24.2% for the year.
- BP is up 10.8% while OXY is up 8.6% so far this year as of Friday’s close. The energy index is up 10.4% YTD.
Word On The Street
Piper Sandler said in April that energy has outperformed the broader market YTD, and despite some near-term wobbles (e.g., refining stocks pulling back on near-term valuation/divergence vs. margins), sentiment remains relatively supportive, with estimates likely biased higher in 2024. They also view IOCs as increasingly well positioned within energy (leading FCF/shareholder returns, upside leverage to oil/refining strength, differentiated resource depth/quality).
Piper Sandler in April gave BP a PT of $43 with a “Neutral” rating and said lower-than-expected oil prices, the inability to execute on disposal targets aimed at de-leveraging the balance sheet, a relatively more paced outlook for shareholder cash distributions, and potentially dilutive acquisitions pose as key company risks.
Analysts at Truist Securities wrote in a May 5 report that, “We forecast Occidental’s 2024 operations are directionally like many other E&Ps with higher 1Q24 CAPEX (excluding CrownRock) and a slight sequential decline in 1Q24 production before ramping the remainder of the year. Further, the sequentially lower forecasted 1Q24 activity combined with lower commodity price is poised to result in one of the lower FCF quarters within the past year, in our view. However, we assume CrownRock (Private) acquisition closes relatively soon combined with assets sales that should result in a high grading of inventory leading to improved well returns.”
