BP: Avoid Buying This Dip

Jul. 06, 2022 12:23 PM ETBP p.l.c. (BP)OXY, XOM15 Comments


  • BP has underperformed its leading peers YTD, despite outperforming the market. However, we believe the party for BP could end soon.
  • BP has recovered remarkably from its COVID bottom. However, its buying momentum failed at a critical level in June, which could signal the end of its medium-term bullish bias.
  • Our valuation model indicates that BP could underperform the market at the current levels. So, we don't encourage investors to buy the dip.
  • We rate BP as a Hold for now, given oversold near-term technicals.
  • I do much more than just articles at Ultimate Growth Investing: Members get access to model portfolios, regular updates, a chat room, and more. Learn More »

BP gas station sign


Investment Thesis

BP p.l.c. (NYSE:BP) stock has been somewhat of a laggard against its leading peers as it delivered a YTD return of 1.95%, as of July 5. Notwithstanding, it has performed admirably as a hedge against the market's tumble

BP revenue change % and adjusted EBIT margins % consensus estimates

BP revenue change % and adjusted EBIT margins % consensus estimates (S&P Cap IQ)

BP FCF margins % consensus estimates

BP FCF margins % consensus estimates (S&P Cap IQ)

BP price chart (monthly)

BP price chart (monthly) (TradingView)

BP price chart (weekly)

BP price chart (weekly) (TradingView)

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Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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