What Are Analysts Saying About The Future Of BP pl.c.'s (NYSE:BP) Business?

Looking at BP pl.c.'s (NYSE:BP) earnings update in December 2017, analysts seem extremely confident, with a bottom line expansion of more than 100% in the upcoming year, relative to the historical 5-year average growth rate of -33.45%. Presently, with earnings at US$3.39B, we should see this growing to US$8.72B by 2019. I will provide a brief commentary around the figures and analyst expectations in the near term. For those interested in more of an analysis of the company, you can research its fundamentals here. Check out our latest analysis for BP

Can we expect BP to keep growing?

The view from 28 analysts over the next three years is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. I've plotted out each year's earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of BP's earnings growth over these next few years.

By 2021, BP's earnings should reach US$10.32B, from current levels of US$3.39B, resulting in an annual growth rate of 16.69%. EPS reaches $0.51 in the final year of forecast compared to the current $0.17 EPS today. Earnings growth appears to be a result of reduction in costs rather than purely top-line expansion as earnings is increasing at a faster rate. Margins is currently sitting at 1.42%, which is expected to expand to 3.52% by 2021.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For BP, I've put together three essential aspects you should further research:

1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
2. Valuation: What is BP worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether BP is currently mispriced by the market.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of BP? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.