BP Stock Forecast: An End to The Oil Spill on BP’s Books

BP Stock Forecast: Summary

  • July brought the announcement that BP finally reached a deal to settle the remaining damage claims from their 2010 Deepwater Horizon oil spill.
  • Despite the recent toll the U.S.’s nuclear deal with Iran has taken on the oil and gas industry, analysts expect the BP stock to rally in the coming weeks.bp
  • BP has enough cash to pay dividends this quarter, even if it was not generated entirely in this quarter.
  • The majority of analysts agree that a healthy future is imminent for BP


The announcement of an $18.7 billion settlement, to be paid out over the next 18 years, will settle all current claims resulting from the 2010 Deepwater Horizon oil spill in the Gulf of Mexico. With this settlement, management can bring their focus back to their business and concentrate on maximizing shareholder value. They also now have a grasp on how much they can expect to pay out each year, thus easing business planning and financial forecasting.

This settlement will allow BP executives to concentrate on the low oil and gas prices plaguing the market now.  This will enable them to remain a fierce competitor in their industry, as other industry giants are dealing with the same issue.  The ability to focus on prices and the potential side effects of the U.S-Iran nuclear deal without worrying about continued fall out from the oil spill takes the advantage away from other major players in the oil and gas industry.  BP managed to keep their debt to equity ratio low throughout this catastrophe and by the end of 2015, analysts estimate revenues to jump over 400%.  The keen financial eye of BP’s management is slowly but surely pushing their stock in a positive direction which mirrors I Know First’s bullish algorithmic forecast.

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