A Quick Look at BP's EPS Forecasts

LONDON -- It's always worth keeping an eye on the earnings forecasts for your favorite companies, especially if you use forward price-to-earnings, or P/E, ratios to gauge when to buy and sell your shares.

You never know, if City brokers have been revising their projections of late, your investments may not be as cheap -- or expensive -- as you think!

Today I'm looking at the earnings per share forecasts for BP  (LSE: BP.L  ) (NYSE: BP  ) , the FTSE 100 (UKX) integrated oil company. All my figures are courtesy of S&P Capital IQ.

The consensus for 2013 is for earnings per share of 62 pence, which puts the 416 pence shares on a forward P/E of 6.6.

The estimates suggest earnings may rise to 65 pence per share for 2014 and climb to 73 pence for 2015. Earnings per share may then rise further to 81 pence, at least according to City analysts.

The data from S&P Capital IQ also indicates BP's revenues may be flat at around £220 billion in 2013 and 2014 before climbing 7% to £233 billion the year after.

The outlook for revenues at BP isn't great although profits may improve over the next few years. But then again, that P/E of around 6.6 looks like the market is already expecting BP to tread water for a while yet.

Whether these projections make BP a buy, a hold or a sell is, of course, up to you given that it is cheaper than the FTSE, which at 5,656 trades on a P/E of 11.4.

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David Kuo owns shares in BP. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


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  • Report this Comment On November 19, 2012, at 3:39 PM, Becker2011 wrote:

    I can't complain too much about BP's treading water with a 5% dividend and a lot of cash to keep that coming. Also, once these civil suits get figured out that will help take away a lot of worries from future buyers.

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