BP p.l.c. Misses EPS by 90%: Analysts Weigh In on the Future

BP p.l.c. (LSE: BP) reported its fourth-quarter and full-year 2024 financial results on February 11, 2025, missing earnings per share (EPS) estimates by a significant 90%. The company's underlying replacement cost (RC) profit for the quarter was $1.2 billion, compared to the expected $2.3 billion. The reported loss for the quarter was $2.0 billion, compared to a profit of $0.2 billion in the previous quarter. The earnings miss was primarily due to weaker realized refining margins, higher impact from turnaround activity, seasonally lower customer volumes and fuels margins, and adverse foreign exchange impacts. Net impairments and adverse fair value accounting effects also contributed to the miss.

Analysts have been quick to weigh in on the situation, with many expressing their views on the company's future prospects. Here's what some analysts have to say:

1. Morgan Stanley: The investment bank downgraded BP to 'Underweight' from 'Equal-weight' following the earnings miss. Analysts at Morgan Stanley cited concerns about the company's ability to deliver on its cost-cutting targets and the potential for further earnings disappointments.
2. JPMorgan Chase: The bank maintained its 'Neutral' rating on BP but lowered its price target to $35 from $40. Analysts at JPMorgan Chase noted that the earnings miss was largely due to one-time items and that the company's underlying performance was still solid. However, they also expressed concerns about the company's ability to meet its cost-cutting targets.
3. Goldman Sachs: The investment bank maintained its 'Neutral' rating on BP but lowered its price target to $32 from $38. Analysts at Goldman Sachs cited concerns about the company's ability to deliver on its growth targets and the potential for further earnings disappointments.



Despite the earnings miss, some analysts remain optimistic about BP's long-term prospects. They point to the company's strong balance sheet, significant cash flow generation, and the potential for growth in its low-carbon energy business. However, others are more cautious, citing concerns about the company's ability to meet its cost-cutting targets and the potential for further earnings disappointments.

In conclusion, BP p.l.c.'s earnings miss has raised concerns among analysts about the company's future prospects. While some remain optimistic, others are more cautious, citing concerns about the company's ability to meet its cost-cutting targets and the potential for further earnings disappointments. As the company works to reset its strategy and improve its earnings performance, investors will be watching closely to see how BP responds to these challenges.