Yahoo Finance BP Jumps 38.3% Month To Date: What's Driving the Rally?
Shares of BP plc BP have jumped 38.3% month to date (MTD) versus the energy sector’s 34.8% growth. Notably, the Zacks Rank #3 (Hold) stock has witnessed upward earnings estimate revisions for 2021 in the past 30 days.
Let’s delve into the factors behind the stock’s price appreciation.
What’s Favoring the Stock?
Although the price of West Texas Intermediate (WTI) crude, approaching $46 per barrel, is significantly below the 2020-beginning price of more than $60 mark, the commodity price has improved considerably in the past few months. The momentum is likely to continue since the market has witnessed the impact of positive vaccine results.
Notably, the vaccine being developed by the University of Oxford and AstraZeneca has shown to be up to 90% effective in preventing people from getting infected with coronavirus. Also, it will be easier to distribute the vaccine since unlike the shots of Moderna, Inc. MRNA and Pfizer Inc. PFE, it could be stored at normal refrigerated temperature.
The positive vaccine data raised hopes that fuel demand will recover considerably once majority of people in the world get vaccinated. Thus, possibilities of energy, now a beaten-down sector, rebounding by next year are high. Overall, improving oil prices are definitely a boon for BP’s upstream operations.
The British energy giant’s strong focus on renewables is also noteworthy since it has been a challenge for companies to provide energy while reducing greenhouse gas emissions. Notably, BP is striving to establish itself as a net zero emissions company by 2050. To turn this goal into reality, the energy giant has decided to lower emissions from its operations related to oil and natural gas to zero. The integrated energy firm also plans to reduce carbon intensity of the energy products it sells by half to achieve the ambitious goal.
Stocks to Consider
A better-ranked stock worth considering in the energy space is Summit Midstream Partners, LP SMLP, sporting a Zacks Rank #1 (Strong Buy).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The stock has seen upward earnings estimate revisions for 2020 in the past seven days.
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Pfizer Inc. (PFE) : Free Stock Analysis Report
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