BP shares were the FTSE 100’s top gainer at the time of writing on Friday as the oil major continued to enjoy the impact of a bumper 1,000p price target and higher oil prices.
The BP share price had gained an additional 4% to 569p on Friday morning and was trading at the highest level since 2019.
BP’s strength builds on gains earlier in the week following the confirmation of bumper 2022 earnings and increased distributions to shareholders.
The oil major hiked their dividend to 6.6 cent for the last quarter and announced a $275bn share buyback programme.
“With so much cash being generated, BP has followed Shell in hiking its dividend, with the final payment for Q4 rising by another 10% to leave it 21% above the equivalent payment last year. If that sounds like a big jump, remember that the company slashed its payout back in the pandemic and the new level is still 40% below where it stood in Q4 2019,”said Steve Clayton, Fund Manager at HL Select.
BP Clean Energy
However, as the oil company announced record earnings, they also said their commitment to clean technology and lower emissions would not be as rigourous as previously expected. BP said they now plan to cut emissions by 20-30% by the end of this decade, instead of 35%-45%.
This will be a concern for environmentalists and anger some politicians who feel BP should be investing their profits into low carbon solutions.
Though it appears the short term focus on hydrocarbons, and provision of immediate shareholder returns, is pleasing investors and has earned BP shares a 1,000p price target from Barclays analysts.