2024 hasn’t been a fun year for BP (LSE:BP.) shares. The energy giant’s seen its valuation steadily slide by almost 20% since January, and the stock now trades at its lowest point over the last year.
That’s quite the change of pace compared to the upward trajectory shareholders enjoyed throughout 2021, 2022, and 2023.
Seeing some pullback after a stellar run’s hardly anything new. The stock market’s always been like that, and a slowdown in oil & gas prices was expected given lower global economic activity. However, with shares trading at a price-to-earnings ratio of just 11.9, does this present an attractive buying opportunity for investors?
Let’s take a look at what the BP growth forecasts have to say about what’s on the horizon.
BP’s revenue and profit predictions
Three quarters of results have been released by BP so far, and based on the latest figures, analysts have started publishing their expectations for the remainder of 2024, as well as 2025.
From a revenue standpoint, BP’s top line’s expected to reach anywhere between $183.3bn and $219.0bn.
| Revenue | 2024 | 2025 |
| Analysts | 13 | 14 |
| Highest | $218.96bn | $290.61bn |
| Lowest | $183.33bn | $154.53bn |
| Average Consensus | $201.87bn | $201.36bn |
Obviously, that’s quite a bit of money. But compared to last year’s performance, the average consensus suggests BP’s sales are going to slip versus 2023’s $210.1bn. And it seems this downward trend’s expected to continue into 2025.
What about earnings? Things aren’t looking great for 2024. BP’s latest third-quarter results were the weakest in almost four years due to falling oil & gas prices. And consequently, earnings fell by almost a third. This disappointing performance is also reflected in the analyst forecasts.
| Earnings per Share | 2024 | 2025 |
| Analysts | 20 | 20 |
| Highest | $0.76 | $0.86 |
| Lowest | $0.51 | $0.55 |
| Average Consensus | $0.63 | $0.69 |
It seems even the most optimistic earnings forecast for 2024’s still coming in lower than last year’s $0.79. So how does this all translate into Buy, Sell, or Hold opinions?
| Opinion | Analysts |
| Buy | 5 |
| Outperform | 5 |
| Hold | 13 |
| Sell | 1 |
| Strong Sell | 0 |
Despite the lacklustre revenue and earnings projections, it seems analysts remain bullish on BP shares. In fact, based on the share price forecasts, it appears that the company’s currently undervalued, given that even the most pessimistic share price prediction indicates that growth lies ahead.
| Opinion | 12-Month Share Price Forecast |
| Optimistic | 647.69p |
| Average | 483.27p |
| Pessimistic | 418.73p |
Should I buy BP shares?
Looking at the analyst predictions, it seems an investment in BP shares right now appears to be a value play. While the business may not be set for tremendous growth in the medium term, the oversold shares may present an attractive entry point.
Having said that, forecasts always need to be taken with a pinch of salt. A lot of assumptions have been baked into these expectations, and there’s no guarantee that these figures will hold true. After all, forecasts are wrong most of the time, especially with commodity-driven businesses where countless external factors can throw a spanner in the works.
Personally, I’m not tempted to add BP shares to my portfolio right now. While I must admit the share price looks attractive, I’d rather own a business whose sales and earnings are in full growth mode rather than looking wobbly.
This post was originally published on Motley Fool
