Producing 7.25% but with a p/e of 186x! What about the price of BP shares?

He BP (LSE: BP) The price of the shares has received a true beating. In a turbulent moment for global markets, the oil giant has been more affected than most.

BP shares have fallen 15% in just one week and have dropped 35% complete in the last 12 months. That is a bruise career for the Ftse 100 heavyweight. The increase in the price of the action during the energy clash fed by Putin of 2022 is now a memory that vanishes.

So what has gone wrong? Much, actually. Obviously, Donald Trump is. Its tariff talk has sent to oil prices sliding with brent crude now that it looms closer to $ 60 per barrel.

Can this Ftse 100 Big Beast roar again?

That is bad news for energy giants as BP. Although the equilibrium point of around $ 40 per barrel can reach, the fall in prices inevitably reached profits and profits. If commercial tensions sink the global economy, then the demand for energy will continue, together with the BP actions.

BP has its own problems. He has spent the last years tied in knots for his strategy. He swing hard towards green energy, only to retreat in recent months after receiving a strong pressure from the Elliott activist, who took a 5% stake and is pressing for a restart.

The president of BP, Helge Lund, a key sponsor of the Net Zero transition, is renouncing. The new CEO Murray Auchincloss is reducing the investment of renewable energies and the increase in oil and gas expenses.

That has left the company under fire of angry climate critics and equally frustrated shareholders.

BP profits were plummeted even before the last market attack, with the profits of 2024 per share for an amazing 97%. As a result, the company's price ratio has shot until 186. A few months ago, the P/E was about five or six times and looked like a bargain. I'm not so sure today.

The recent commercial update, published on April 11, did not help. BP said that gas and low carbon energy production are low, with only a slight increase in oil. The gas trade was “weak” while net debt increased by $ 4 billion in the quarter. While BP expects that to retire due to seasonal factors, it joined the gloom.

I just hope the dividend is maintained

Their repurchases of star actions have been cut. BP was spending up to $ 1.75 billion per quarter buying its own shares. Now that it has been reduced to between $ 750 million and $ 1 billion. No wonder, given the fall in profits, but it is still a blow.

After the drop in the price of the action, the BP prognosis will produce 7.4% in 2025 and 7.72% in 2026. Hopefully the dividend is sustainable. You cannot discard a cut.

If central banks begin to reduce interest rates to compensate for a slowdown, their debt of $ 23 billion will be cheaper for energy service and demand could increase. That could throw a line of life into BP.

I bought BP shares a couple of months ago, taking advantage of the bass P/E and the improved performance. Obviously, it hasn't done well until now. I am holding, but this is a very risky action today. In fact, it has been since Deepwater Horizon blocked in 2010, about 15 years ago.

Gangu hunters taking into account that actions should approach extreme caution. There are many things here, and we don't know how it will work. Or even if it's a bargain!