BP Cut to Neutral at BofAML on More Balanced Risk/Reward
2015-04-13 07:57:07.521 GMT
By Benjamin Dow
(Bloomberg) -- BP’s recent shr price movement means
valuation no longer offers sufficient upside to warrant buy
rating, BofAML says, also lowers PT 5.2% to 455p.
* Says worst-case penalties in phase 3 trial over Clean Water
Act (CWA) violations from Macondo blowout may exceed BP’s
provisions by ~$10B, while not threatening co.’s ability to
pay its div.
* Says CWA clarity “welcome”; investors may then start
to focus on more uncertain litigation risks like state,
local claims
* Says PT and shr price not currently reflecting discount
for continuing litigation risks
* Says 5.69% div. yield now close to European peers,
currently doesn’t give significant premium
* 2016 P/E est. 13x is more than historical averages,
roughly in line with peers
* 2016 P/E est. 13x is more than historical averages,
roughly in line with peers</li></ul>
* NOTE: Total P/E on 2016 ests. is 11.8x, Shell 10.7x, Statoil
15x: Bloomberg data
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To contact the reporter on this story:
Benjamin Dow in Moscow at +7-495-771-7735 or
bdow2@bloomberg.net
James Ludden
2015-04-13 07:57:07.521 GMT
By Benjamin Dow
(Bloomberg) -- BP’s recent shr price movement means
valuation no longer offers sufficient upside to warrant buy
rating, BofAML says, also lowers PT 5.2% to 455p.
* Says worst-case penalties in phase 3 trial over Clean Water
Act (CWA) violations from Macondo blowout may exceed BP’s
provisions by ~$10B, while not threatening co.’s ability to
pay its div.
* Says CWA clarity “welcome”; investors may then start
to focus on more uncertain litigation risks like state,
local claims
* Says PT and shr price not currently reflecting discount
for continuing litigation risks
* Says 5.69% div. yield now close to European peers,
currently doesn’t give significant premium
* 2016 P/E est. 13x is more than historical averages,
roughly in line with peers
* 2016 P/E est. 13x is more than historical averages,
roughly in line with peers</li></ul>
* NOTE: Total P/E on 2016 ests. is 11.8x, Shell 10.7x, Statoil
15x: Bloomberg data
For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>
To contact the reporter on this story:
Benjamin Dow in Moscow at +7-495-771-7735 or
bdow2@bloomberg.net
James Ludden