BP's Q2 Estimates Downgraded, But This Analyst Anticipates 10% Dividend Hike And Continued Buybacks

RBC Capital Markets analyst Biraj Borkhataria updated estimates of BP p.l.c. BP following its second-quarter trading update release this morning. The analyst rates BP with an Outperform rating and a 650p price target.

In the oil production and operations segment, the company anticipates realizations to have a favorable impact of $0.1 billion-$0.3 billion and expects Upstream production in the quarter to remain flat compared to the prior quarter.

The analyst writes that in the gas trading segment, they had high expectations due to increased volumes at Tangguh, but the actual average result fell short of their projections.

Thus, the analyst cut the Gas and low-carbon operating profit estimate from $2.4 billion to $1.6 billion.

In the liquids segment, despite initially forecasting average trading, Borkhataria revised operating profit estimates downward from $3.4 billion to $3.3 billion.

Overall, the analyst lowered the net income estimate from $3.3 billion to $2.7 billion and adjusted CFFO (excluding working capital, pre-Macondo) estimates from $8 billion to $7.5 billion.

Ahead of the results, the analyst continues to expect BP to raise its dividend by 10% and confirm buybacks totaling $1.75 billion per quarter for the next six months.

Investors can gain exposure to the stock via Direxion Hydrogen ETF (ARCA: HJEN) and First Trust Exchange-Traded Fund IV FT Energy Income Partners Strategy ETF (ARCA: EIPX).

Price Action: BP shares are down 4.45% at $34.93 at the last check Tuesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo: Jon Lyall via Shutterstock

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