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CFDs are complex instruments. 72% of retail client accounts lose money when trading CFDs, with this investment provider. You can lose your money rapidly due to leverage. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money.

Is BP worth 399p a share?

Over the last three months, analysts have offered an average 12-month price target of 399p per share for the oil and gas major. But is the BP share price really capable of such a meteoric rise amid a myriad of headwinds?

BP Source: Bloomberg

Over the last three months, analysts covering BP have offered an average 12-month price target of 399p per share for the oil and gas major.

But is the BP share price really capable of such a meteoric rise amid a myriad of headwinds?

Ambitious green targets for BP could hinder rally to 399p a share

Shares in BP could trend lower after the company set itself ambitious green energy targets, forcing the oil and gas major to accept lower returns as it transitions away from fossil fuels.

The company plans to become the one of the world’s largest renewable power generators, with it targeting 50 gigawatts of wind, solar and hydropower in its portfolio by 2030.

‘Energy markets are fundamentally changing, shifting towards low carbon, driven by societal expectations, technology and changes in consumer preferences.’ BP chairman Helge Lund said in a statement. ‘And in these transforming markets, bp can compete and create value, based on our skills, experience and relationships.’

‘We are confident that the decisions we have taken and the strategy we are setting out today are right for bp, for our shareholders, and for wider society,’ he added.

BP unveils earnings reveal uphill battle ahead if stock is to hit 399p

While the oil and gas company’s new strategy for net zero and a shift to low carbon is great news for the environment, it spells disaster for its share price over the near-term, with its latest quarterly earnings revealing just how costly its transformation will be.

‘These headline results have been driven by another very challenging quarter, but also by the deliberate steps we have taken as we continue to reimagine energy and reinvent BP,’ CEO Bernard Looney said in its half-year results earlier this month.

‘In particular, our reset of long-term price assumptions and the related impairment and exploration write-off charges had a major impact,’ he added. ‘Beneath these, however, our performance remained resilient, with good cashflow and – most importantly – safe and reliable operations.’

Brent crude oil prices could stop BP from hitting 399p per share

Brent crude looks to finally be on the way out of a consolidation phase, with price breaking through the top end of a symmetrical triangle formation, according to Josh Mahony, senior market analyst at IG.

‘With price tentatively rising through the $45.83 level, it is likely we will see another strong move higher from here,’ he said.

‘Given that bullish breakout, it is likely we will see further upside, with a break below the $44.73 level required to negate this bullish view.’

Brent crude
Brent crude

How to trade stocks with IG

Looking to trade BP and other stocks? Open a live or demo account with IG and buy (long) or sell (short) shares using derivatives like CFDs in a few easy steps:

  1. Create an IG trading account or log in to your existing account
  2. Enter ‘BP’ in the search bar and select it
  3. Choose your position size
  4. Click on ‘buy’ or ‘sell’ in the deal ticket
  5. Confirm the trade

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

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