BP: Comprehensive Net Zero Roadmap Leading The Industry, Says Raymond James Analyst

Raymond James analyst Justin Jenkins reiterated an Outperform rating on BP P.L.C. BP, lowering the price target to $45 from $47.

While several oil companies have put out net zero targets for 2050, BP's plan has been the most comprehensive road map across the industry, the analyst notes.

For 2Q, the analyst lowered the EPADS estimate to $1.15 (from $1.36) on lower Gas & Low Carbon and Oil Production & Operations estimates.

Higher Customer & Product estimates and a higher buyback cadence partly offset the reduction in EPADS estimate. 

Given BP's surplus cash outlook, share repurchases have and will continue to reduce share count materially, notes Jenkins. The analyst modeled ~$7.5 billion in 2023 and $8 billion in 2024, with the share count declining by ~20% from peak 1Q21 levels by YE24.

The analyst lowered 2023 EPADS to $5.60 (from $6.00) on lower 2Q23 estimates. The analyst decreased the FY23 revenue estimate to $254.03 billion from $256.82 billion.

For similar reasons, the analyst lowered 2024 EPS to $6.00 (from $6.35). Revenue estimates are reduced to $268.63 billion from earlier expectations of $270.60 billion.

Price Action: BP shares are trading higher by 0.78% To $36.60 on the last check Thursday.