British oil major British Petroleum (BP) is up against a few different challenges right now, ranging from currency fluctuations to a dramatic drop in price for oil and gas. These could take as much as $1.2 billion away from the bottom line in a worst case scenario.

However, the company quelled investor fears by saying that its uptick in production volume alongside its burgeoning trading business will counter these concerns.

Natural gas prices are plummeting alongside oil prices, which could lead to a $0.2-0.4 billion and $0.3-0.6 billion hit respectively. Egypt’s pound is dropping in value simultaneously, which could take another $0.2 billion piece of the pie.

Brent crude prices are down 1.4% while natural gas prices on the US Henry Hub have slipped nearly 22% through the first quarter. While this is the lowest we’ve seen prices fall in years, it appears to be a correction. This is coming off a year in which an abnormally warm winter and uptick in production after Russia invaded Ukraine sparked volume.

The oil and gas trading business could pick up the slack though, while higher upstream production and solid margins for its refining segment give the company a lift as well. The expectation is that these improvements should offset the cost concerns for the upcoming first quarter results.

This will be the first quarterly earnings report for new CEO Murray Auchinloss, with big shoes to fill after Bernard Looney left the company last fall.

2024 is off to a good start as BP has gained 10% through the first 4 months. Investors have more or less taken the good away from this latest update, as the stock is up a modest 1% this morning. 

That being said, is it time to buy BP? We found 3 things when taking a look at the VectorVest stock analysis software that will help you make your decision one way or the other.

BP Has Poor Safety, But Fair Upside Potential and Very Good Timing Earn the Stock a Buy

VectorVest simplifies your trading strategy through a proprietary stock rating system which delivers actionable insights in just 3 ratings. These are relative value (RV), relative safety (RS), and relative timing (RT). 

Each of these ratings sits on a scale of 0.00-2.00 with 1.00 being the average, making interpretation quick and easy. It gets even better, though. You’re given a clear buy, sell, or hold recommendation for any given stock at any given time based on its overall VST rating. As for BP, here’s what you need to see:

  • Fair Upside Potential: The RV rating compares a stock’s long-term price appreciation potential (based on a 3-year price projection), AAA corporate bond rates, and risk. This offers far superior insights than the typical comparison of price to value alone. The RV rating of 0.86 is a ways below the average, but still deemed fair for BP.
  • Poor Safety: The RS rating is a risk indicator calculated through a detailed analysis of the company’s financial consistency & predictability, debt-to-equity ratio, business longevity, sales volume, price volatility, and other factors. BP has a poor RS rating of 0.72 for the time being.
  • Very Good Timing: The RT rating is a trend indicator based on the direction, dynamics, and magnitude of a stock’s price movement, It’s taken day over day, week over week, quarter over quarter, and year over year. As you can see from the stock’s performance, BP has a very good RT rating of 1.35.

The overall VST rating of 1.04 is fair for BP, and it’s enough to earn the stock a BUY recommendation within the VectorVest system. We encourage you to take a closer look at this opportunity with a free stock analysis today and make your next move with complete confidence and clarity!

BP Will Counter Currency Challenges & Price Slumps With Volume: Time to Buy BP Stock Today?
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Use VectorVest to analyze any stock free. VectorVest is the only stock analysis tool and portfolio management system that analyzes, ranks and graphs over 18,000 stocks each day for value, safety, and timing and gives a clear buy, sell or hold rating on every stock, every day.

VectorVest advocates buying safe, undervalued stocks, rising in price. BP spoke to concern surrounding plummeting prices for oil and gas alongside a dip in Egypt’s currency, but mentioned that higher production volume and solid performance in its trading business should offset these issues. The stock itself has fair upside potential, poor safety, and very good timing.

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