UK-based energy companies BP PLC (GB:BP) and Shell (UK) (GB:SHEL) have received Strong Buy ratings on TipRanks. Analysts expect more than 30% growth in their share prices.
Speaking of the energy sector, these companies are benefiting from the increasing demand for oil and gas along with soaring prices since the outbreak of the Russia-Ukraine war. Also, these companies pay regular dividends.
Both Shell and BP are part of the Trending Stocks list for the UK market. These stocks are currently on the radar of analysts after they reported strong yearly results for 2022.
Let’s have a look at the details.
BP is one of the leading companies in the world, providing energy products and services to customers worldwide.
Over the course of soaring fuel prices, the company’s stock has been enjoying the ride and has gained more than 50% in the last year. Last month, the company announced its fourth quarter and 2022 earnings, which further pushed the share price higher.
The company posted profits of $27.7 billion in 2022, up from $12.8 billion last year. It also witnessed its production costs being the lowest in the last 16 years, which depicts operational efficiency for the company.
Moving forward, the company announced that it would invest an additional $8 billion in its energy transition by 2030. And another $8 billion towards its energy security and affordability.
On the shareholder return front, the company announced a buyback of $2.75 billion to be completed by May 2023.
What is the Price Target for BP?
According to TipRanks’ consensus, BP stock has a Strong Buy rating, with 10 Buy and three Hold recommendations.
The average target price is 660.08p, which is 35.4% higher than the current price.
Shell PLC (UK)
Shell is a UK-based oil and gas company that produces energy products such as fuels, oil, LPG, lubricants, and more.
The company posted record earnings in its 2022 annual results. Shell posted a profit of $39.9 billion in 2022, up from $19.29 billion in 2021. The numbers were driven by higher fossil fuel demand and prices. The company also witnessed a solid recovery in its LNG (liquefied natural gas) trading.
Moving onto the shareholder returns, the company reported a 15% increase in its dividends in the fourth quarter of 2022, pushing the full-year dividend to $1.03 per share. The company also announced a $4 billion share buyback program.
Following the results, many analysts have reiterated their Buy rating on the stock.
Is Shell Stock a Good Buy Now?
SHEL stock has a Strong Buy rating on TipRanks based on a total of 15 recommendations, out of which 13 are Buys.
The average target price for the stock is 2,953.8p, which implies an upside of 30.4% on the current price.
Investors are concerned about fuel prices already reaching their peak points. However, analysts are optimistic about the reopening of China, which will further boost fuel prices by the end of this year.
Both Shell and BP have posted record numbers in their 2022 annual results, and analysts are bullish on the outlook as well. These companies also offer solid shareholder returns, which makes them ideal investment options.