BP Share Price Forecast June 2021 – Time To Buy BP Shares?

Falling oil demand during the 2020 pandemic has seen BP shares fall below $300 on the stock market.

This has been the fate of most businesses as the world tried to arrest the coronavirus outbreak by imposing lockdowns in volatile areas.

However, BP shares are set for a remarkable turn-around if the company plays its cards right. BP has grown 30% year-to-date, pointing to a long-term uptrend as business activities return to pre-pandemic levels.

This has also been in part because of pent-up crude oil demand and a hike in oil prices.

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Even though the UK-based oil giant seems to be on a comeback, it lost 0.35% ending Friday trading session with a $313.97 valuation.

However, the company is on the march to carve out a new future focusing more on green energy investments.

If you are on the lookout to buy BP stock for a bargain, this single-day drop may be the sign you have been waiting. This article explores the company’s technical and fundamental analysis to identify opportunities in the current stock position.

BP Shares UK – Technical And Fundamental Analysis

According to 14 analysts, BP shares price target for next year is between $374.94 and $694.50, with a median average of $523.19 in 2023. This will see BP shares rise 19.4% from its current price.

Meanwhile, BP paid an unimpressive $0.26 for its dividends for the 2020 closing year, largely attributed to the fall in oil demand given the global pandemic. For Q1 2021, BP says it would pay out an interim dividend of $0.0525 per ordinary share.

The probability of this changing is high given that more businesses are opening and commercial activities resume. This will see BP shares recover lost grounds and reclaim most of its market share, making its 2019 trading levels.

BP shares technical analysis on the trading chart is mixed with the 20-day moving average (MA) support trading above the price action. However, its relative strength index (RSI) is good, posting 48.07.

BP’s long-term outlook on the 200-day MA is bullish, with the price action surpassing the $269.70 mark of the indicator.

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BP Shares UK – What Are Analysts Saying?

Oil prices are gradually picking up, and BP has made some chunk of money from them. In its Q1 earnings, BP said it earned $6.1 billion in operating cash with a further $4.8 billion from divestment proceeds. Its Q1 profits stood at over $4.4 billion.

But this is just a part of a long-term game. BP said it is planning to increase its green energy investments by 1000% in the next decade, and it would be selling off its $22 billion worth of oil assets by 2025. This was in response to an International Energy Agency report on CO2 emissions for the year.

Making good on its promise, BP has invested $566 million in a solar farm in Northern Spain through Lightsource BP, a company it has a 50% stake in. It has also invested heavily in solar farms in 12 US states and Portugal, worth more than $2 billion collectively.

In its march towards a green future, BP recently joined a multi-national consortium to develop a 2,591km square mile of a wind farm in Norway with more investments in the UK, Denmark, and others under development.

BP has also made strategic partnerships with multiple companies, including Equinor, Microsoft, and Jinkopower. It is also planning to collaborate with fellow energy company Eni to merge its oil and gas assets in Angola.

This pivot to a green business model has seen the investment arm of UK-based Barclays analysts say that BP is a company to watch out for.

Our analysis shows the cash flow generation of the business as having the ability to support a 10% cash return to shareholders in the form of dividends and buybacks in a $60 per barrel environment, which would be the highest in the sector,” the Barclays team noted.

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