FTSE 100

How has the BP share price performed versus the FTSE 100 index?

Since the start of the year, the BP share price (LON: BP) (BP.L) has risen by 16%. That’s a significantly higher return than the 2% managed by the FTSE 100 index (INDEXFTSE: UKX) over the same time period.

However, looking back further to the past 12 months, it’s a different story. The FTSE 100 has risen 34% in that time, while BP shares are currently up around 16% versus their price level from a year ago.

Recent investor news

The most recent investor update released by BP was its fourth quarter results reported on 2 February 2021. They highlighted the challenges faced by the company during a period of lockdowns and disruption caused by Covid-19 that prompted weaker demand from consumers.

For example, its underlying replacement cost profit was little changed versus the previous quarter at $0.1 billion. For the full year, the firm reported a loss of $5.7 billion versus a profit of $10 billion for the previous year. This was caused by lower oil and gas prices, exploration writedowns prompted by a changed outlook for the wider oil and gas sector, as well as lower refining margins versus the previous year.

BP also highlighted the changes it is making to its business as it seeks to reinvent itself. For instance, over half of the 10,000 people expected to leave the company had done so by the end of the financial year. It also commenced four new major Upstream projects during the year, including three in the final quarter. It added 300 strategic convenience store sites to its estate, while it experienced a 6% rise in convenience store margins that helped to partially offset a 14% decline in retail fuel volumes.

The firm also completed the formation of its strategic US offshore wind partnership with Equinor in January 2021. It intends to develop a ‘green’ hydrogen project at its Lingen refinery in Germany as part of plans to move towards sustainable forms of energy.

BP share price prospects

In terms of analyst forecasts, the firm is expected to return to profitability in the current financial year after the previously mentioned loss incurred in 2020. Analysts anticipate that it will then deliver a 35% rise in earnings per share next year. Using next year’s forecast, as well as the current BP share price of 296p, the company has a forward price-earnings ratio of around 9.

Analysts are currently forecasting dividends per share of around 16.5p in the current year and next year. This means that analysts expect the stock to yield around 5.6% per annum over the next two years. The next investor update from the firm is due to take place on 27 April 2021, with BP set to release its first quarter results on that date.

Not Investment Advice Note: Views expressed are those of the writer. The author does not own any stocks mentioned. The article is information, not advice. Share prices can rise and fall. Past returns are not a guide to the future. Please do your own research.