Yahoo Finance BP p.l.c. Just Missed EPS By 24%: Here's What Analysts Think Will Happen Next
As you might know, BP p.l.c. (LON:BP.) last week released its latest first-quarter, and things did not turn out so great for shareholders. It looks like quite a negative result overall, with both revenues and earnings falling well short of analyst predictions. Revenues of US$49b missed by 14%, and statutory earnings per share of US$0.13 fell short of forecasts by 24%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
See our latest analysis for BP
After the latest results, the consensus from BP's 16 analysts is for revenues of US$191.9b in 2024, which would reflect a perceptible 4.6% decline in revenue compared to the last year of performance. Statutory earnings per share are predicted to shoot up 46% to US$0.83. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$211.4b and earnings per share (EPS) of US$0.84 in 2024. So it looks like the analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is supposed to maintain EPS.
The average price target was steady at UK£6.10even though revenue estimates declined; likely suggesting the analysts place a higher value on earnings. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values BP at UK£10.04 per share, while the most bearish prices it at UK£5.02. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. Over the past five years, revenues have declined around 1.7% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 6.1% decline in revenue until the end of 2024. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue shrink 0.6% per year. So it's pretty clear that BP revenue is expected to decline at a faster rate than the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Unfortunately they also cut their revenue estimates for next year. Forecasts imply the business' revenue is expected to perform worse than the wider industry. That said, earnings per share are more important for creating value for shareholders. With that said, earnings are more important to the long-term value of the business. The consensus price target held steady at UK£6.10, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on BP. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for BP going out to 2026, and you can see them free on our platform here..
However, before you get too enthused, we've discovered 2 warning signs for BP that you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
