Hargreaves Lansdown argues that BP’s (LON:BP) future looks brighter than it has done in a while, as long as the oil price holds steady, Citywire reports. The comments came after the blue-chip oil major updated investors on its second-quarter performance yesterday, posting a rise in profits and hiking its payout to shareholders for the first time since the third quarter of 2014.
BP’s share price rose in the previous session, gaining 1.38 percent to close at 573.30p and outperforming the broader UK market. The group’s shares have added more than 28 percent to their value over the past year.
HL weighs in on BP after results
Citywire quoted Hargreaves Lansdown analyst Nicholas Hyett as commenting yesterday that BP’s results showed that the oil major was “back to something that might almost be considered normal”. The energy giant reported yesterday that its underlying replacement cost profit had soared in the second quarter of the year, and hiked its dividend for the first time since the third quarter of 2014 as it continued to benefit from stronger oil and subsiding payments over the Gulf of Mexico oil spill.
“Cash generation is slightly lower than analysts had hoped for […] but has still proven enough to fund necessary capital investment and increase the dividend,” the analyst pointed out, adding that “with payments relating to the Deepwater Horizon disaster falling and oil prices bouncing, the future looks brighter for BP than it has for some time”.
Other analysts on oil major
Deutsche Bank reaffirmed BP as a ‘buy’ yesterday, valuing the shares at 620p, while Goldman Sachs, which also sees the oil major as a ‘buy,’ set a price target of 730p on the stock. According to MarketBeat, the blue-chip group currently has a consensus ‘buy’ rating and an average price target of 609.50p.