Stock Traders Purchase High Volume of Call Options on BP (NYSE:BP)

Key Points

• Unusually heavy call option activity hit BP, with traders buying 32,885 call options, about 47% above normal volume. That suggests some investors are positioning for additional upside in the stock.
• BP’s recent fundamentals were broadly positive: the company reported strong Q2 results, helped by higher oil prices, better refining margins, stronger trading, and lower net debt. It also beat earnings and revenue estimates in its latest quarterly report.
• At the same time, BP continues to pull back from parts of its low-carbon strategy, including closing its corporate venture arm and taking a write-down tied to its low-carbon portfolio. The stock was down 0.8% on the day despite these developments.

BP p.l.c. (NYSE:BP - Get Free Report) was the recipient of unusually large options trading activity on Thursday. Stock investors acquired 32,885 call options on the company. This represents an increase of approximately 47% compared to the typical volume of 22,402 call options.

Key Stories Impacting BP

Here are the key news stories impacting BP this week:

• Positive Sentiment: BP reported strong Q2 performance, helped by higher oil prices, stronger refining margins, and a decline in net debt, which could support earnings estimates and cash flow outlook. BP flags boost from oil prices, refining margins as net debt falls
• Positive Sentiment: BP also flagged stronger oil trading, indicating it is benefiting from elevated commodity prices and trading conditions. BP flags stronger oil trading as it continues to cash in on soaring prices
• Neutral Sentiment: Unusually large call option volume suggests some traders are positioning for further upside, but it is not a fundamental catalyst by itself.
• Negative Sentiment: BP is closing its corporate venture arm and selling most minority holdings in venture capital businesses, a move that reinforces its retreat from parts of the energy-transition strategy and may be seen as a setback for its low-carbon ambitions. Oil giant BP shutters its corporate venture arm after 20 years
• Negative Sentiment: BP’s latest write-down tied to its low-carbon portfolio underscores the cost of the energy-transition reset and may weigh on investor confidence in management’s capital allocation. BP LSE: BP. Writes Down $1 Billion And Pulls Back On Low Carbon Push

BP Stock Down 0.8%

Shares of NYSE BP traded down $0.34 during mid-day trading on Thursday, reaching $40.99. The company had a trading volume of 3,583,340 shares, compared to its average volume of 11,724,314. The firm has a 50 day simple moving average of $41.47 and a two-hundred day simple moving average of $40.99. The stock has a market cap of $107.36 billion, a P/E ratio of 34.16, a PEG ratio of 0.75 and a beta of 0.17. The company has a current ratio of 1.22, a quick ratio of 0.87 and a debt-to-equity ratio of 0.68. BP has a 52-week low of $31.58 and a 52-week high of $48.27.

BP (NYSE:BP - Get Free Report) last announced its earnings results on Tuesday, April 28th. The oil and gas exploration company reported $1.24 earnings per share for the quarter, topping the consensus estimate of $1.00 by $0.24. BP had a net margin of 1.62% and a return on equity of 12.06%. The business had revenue of $52.26 billion during the quarter, compared to the consensus estimate of $48.50 billion. During the same quarter in the prior year, the firm earned $0.53 earnings per share. The business's quarterly revenue was up 11.4% compared to the same quarter last year. Sell-side analysts predict that BP will post 5.19 earnings per share for the current year.

BP Dividend Announcement

The firm also recently declared a quarterly dividend, which was paid on Friday, June 26th. Shareholders of record on Friday, May 15th were given a dividend of $0.4992 per share. This represents a $2.00 dividend on an annualized basis and a yield of 4.9%. The ex-dividend date of this dividend was Friday, May 15th. BP's payout ratio is 164.17%.

Wall Street Analysts Forecast Growth

BP has been the subject of a number of analyst reports. UBS Group upgraded BP from a "neutral" rating to a "buy" rating in a research report on Wednesday, April 15th. Zacks Research cut BP from a "strong-buy" rating to a "hold" rating in a research report on Monday, May 25th. Wall Street Zen downgraded shares of BP from a "strong-buy" rating to a "buy" rating in a report on Saturday, June 20th. Weiss Ratings reiterated a "hold (c-)" rating on shares of BP in a research report on Thursday, June 18th. Finally, HSBC upgraded BP from a "reduce" rating to a "hold" rating and boosted their price objective for the stock from $35.10 to $45.30 in a research note on Friday, March 20th. Two investment analysts have rated the stock with a Strong Buy rating, eleven have issued a Buy rating, eight have given a Hold rating and three have issued a Sell rating to the company. According to MarketBeat, the stock has a consensus rating of "Moderate Buy" and a consensus price target of $46.64.

Institutional Investors Weigh In On BP

Hedge funds and other institutional investors have recently modified their holdings of the stock. Strategic Advocates LLC acquired a new stake in BP in the 3rd quarter valued at approximately $25,000. YANKCOM Partnership boosted its position in BP by 1,068.3% during the 4th quarter. YANKCOM Partnership now owns 958 shares of the oil and gas exploration company's stock worth $33,000 after acquiring an additional 876 shares during the period. Financial Life Planners acquired a new stake in shares of BP during the 1st quarter valued at $39,000. Triumph Capital Management bought a new position in BP during the third quarter valued at approximately $43,000. Finally, LRI Investments LLC lifted its position in shares of BP by 76.2% during the 4th quarter. LRI Investments LLC now owns 1,276 shares of the oil and gas exploration company's stock worth $44,000 after buying an additional 552 shares during the period. Institutional investors own 11.01% of the company's stock.

About BP

BP plc is a British multinational integrated energy company headquartered in London. Originating in the early 20th century as the Anglo-Persian Oil Company, BP has grown into one of the world's largest oil and gas companies, operating across exploration and production, refining and marketing, trading, and a range of low-carbon businesses.

The company's core activities include upstream exploration and production of crude oil and natural gas, midstream and trading operations, and downstream refining, marketing and supply of fuels, lubricants and petrochemicals.

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