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The City’s Latest Forecasts For BP plc

It’s always worth keeping an eye on the earnings forecasts for your favourite companies, especially if you use forward P/E ratios to gauge when to buy and sell your shares.

You never know, if City brokers have been revising their projections of late, your investments may not be as cheap — or expensive — as you think!

Today I’m looking at the earnings per share (EPS) forecasts for BP (LSE: BP) (NYSE: BP.US), the FTSE 100 oil and gas giant. All my figures are courtesy of S&P Capital IQ.

The consensus for 2013 is for underlying EPS of $0.78, which puts the 441p shares on a low forward P/E of 8.8.

However, the estimates suggest earnings may rally to $0.91 per share for 2014 and advance further to $0.93 for 2015, at least according to City analysts.

The latter projection places the shares on a P/E of 7.6.

The data from S&P Capital IQ also indicates total revenue at BP may come in at around $349bn and $345bn during 2013 and 2014 respectively, which compares to more than $370bn for 2012.  However, EBITDA is predicted to rise throughout 2013 and 2014, from $39.6bn in 2012, to $41bn and then $42bn.

All told, the forecasts don’t seem to be particularly extravagant, but with the near-term P/E of 8.8, it looks as if the market isn’t expecting earnings to advance quickly anytime soon.

Whether these projections make BP a buy, a hold or a sell is of course something only you can decide. To put the company’s multiple into perspective, the FTSE 100 at 6,441 trades on a P/E of 14.7.

If you already own BP and are looking for great value blue chips, this exclusive wealth report reviews eight FTSE names you may wish to consider too.

What’s more, all eight selections are owned by legendary investor Neil Woodford.  Just click here to download “8 Shares Held By Britain’s Superinvestor” right now — it’s free!

>  Chris does not own any share mentioned in this article.