Newspaper article The Evening Standard (London, England)

Boost for BP as Goldman Turns Bullish; MARKET ROUND-UP

Newspaper article The Evening Standard (London, England)

Boost for BP as Goldman Turns Bullish; MARKET ROUND-UP

Article excerpt


COULD the bear run in shares of BP be about to come to an end? That was the question being posed by investors after one of the City's big guns changed its recommendation on the shares ahead of tomorrow's full-year results.

US broking house Goldman Sachs, which has been lukewarm on BP for some time, dramatically changed its recommendation on the oil giant from neutral to buy just hours before outgoing chairman Lord Browne unveils final trading numbers.

Goldman says the de-rating of BP, up 71/2p today at 5421/2p on turnover of 63 million shares, had been "severe", with the shares having collapsed 25% since last April when the price reached 712p.

The fatal explosion at its Texas City refinery in 2005 combined with leakage last year at the Prudhoe Bay pipeline and its subsequent partial closure dented BP's image globally and caused much of the sell-off in the shares.

Goldman has told clients it expects tomorrow's results to be a potential catalyst despite the high probability of lower guidance targets as the outlook for 2007-8 improves. Its target price of 615p offers about 14% potential upside, second only to Italian rival ENI in the European sector.

Today's move by Goldman was taken against the backdrop of a rise in the oil price overnight. The global crude future rose more than $1.50 to $58.80 a barrel but eased slightly today.

Shares generally traded in a narrow range with the FTSE 100 index posting a modest 0.1 rise to 6311.0 in thin trading. Wall Street extended Friday's losses this afternoon, leaving the Dow down 13.90 at 12,639.60.

Star performer among blue-chips was Johnson Matthey, which was squeezed 73p higher to 1565p after being raised from neutral to buy and having its price target jacked up from 1490p to 1800p by UBS. The metallurgist has performed poorly of late but is now the Swiss broker's preferred pick of the chemicals sector. UBS says earnings are set to grow strongly over the next five years, and forecasts compound growth of 13% a year. …

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