Thursday, June 10, 2010

Citigroup (NYSE:C) Loves BP (NYSE:BP) Share Price

Citigroup (NYSE:C) analyst Mark Fletcher, while acknowledging BP (NYSE:BP) will face major challenged ahead, said the long-term outlook for the stock is stable, and the current price is based on worst-case scenarios.

Even so, Fletcher increased his risk rating on BP from medium to high, looking at the high end of the estimates of $40 billion as what they could ultimately pay out for all liabilities.

"We recognize that there is little certainty or definition around the costs of the spill to BP's shareholders," said Fletcher. "The quantum of cost and the share of burden remains uncertain but we have adjusted for almost four times what we believe reasonable cost to be."

In the long-term, Fletcher is viewing the situation of the stock, as mentioned, being discounted on the basis of the worst case scenario, rather than the likely outcome, making the company undervalued in his opinion.


  1. Sounds realistic to me.

    Too many doom and gloomers about for sure.

    But w/e I don't care either way I just chase the market.

    BP is sending me to earlier retirement over this, I can't complain.

    Turn your lemons into lemonade they always say.

  2. citi, the same citi that is trading at the mid 3.90? Haha. The same one that can't get it together and suckers people into their pit stock? (besides intra-day traders who make a 5-10% bump some days)
    Good luck. A long shot helping a long shot. Blind leading the blind.

  3. Any Anerican citizen who invests in in BP now is not an American in my opinion.

  4. At this price if you're not buying you're leaving money on the table. Any lawsuits will be chumpchange for BP.

  5. Not American by investing in BP? Newsflash, BP isn't in the business of dumping oil into the ocean and ruining american coastlines, @%$& happens, they know it happened, they admit it happened, they said they'd pay for it, sounds accountable to me. I suppose to be an 'good american' you need to pass the buck elswehere these days?

  6. donot fall in trap because of todays jump in share price

  7. Americans eh !
    Fact is, dozens of oil companies obtain drilling rights from the American government and run on a much lower safety level than BP, they were just the unlucky ones.

    America is happy to take money from oil production, but looks instantly to blame someone else when there is a problem. Wasn't it Americans who signed the drilling rights approval and oversea the safety of operations.

    Despite BP being British owned the rig was staffed by, yes you guessed it, Americans.

    I am sure the invasion of Iraq never caused any problems, and no one got hurt, and it had nothing to do with oil.

    Amercians eh !

  8. BP have taken responsibility and will pay out to those who claim. What responsibility has the US taken admitting that the safety certificates agency didn't do their job?...none so far.

  9. BP had an Operating Income of $28 billion last year. So I think BP is financially strong enough to recover. They are the fourth LARGEST corporation in the world!

  10. The liabilities are unlimited at this point until they successfully put a containment on the wells.

    Criminal investigations and various COMPOUNDING human/political/environmental litigation is on the way.

    The damage is still "unlimited" because of water currents, potential hurricanes, economic damage, etc. etc.

    I think the stock price could hit $10 or lower because of compounding negative market news and liabilities surrounding this company. The american portion of this company could end up being in a receivership for the short term or worse, bankruptcy is on the table.

  11. issue the press release that all leaks are blocked and repaired guess where the stock price is going!

    If Americans keeps selling that's cool cos I just keep buying!

  12. Anyone dumping Haliburton stock cos of Gulf disaster? They are the guys that broke the well after all...

  13. Think about it, the liabilities literally are unlimited as we speak so long as oil keeps gushing from the bottom of that rig.

    Cash flow or no Cash flow, this could become an $60-$80 billion cleanup that would end up being a little bit a multicoast / multistate disaster.

    How about this scenario:

    Say oil starts flowing into mexico, and the mexican goverment starts coming after BP as well.

    Did anyone see oil start showing up in the florida beaches?

  14. I think BP is financially strong, but I also think this liability would do some severe damage to the company. I don't think the company would go bankrupt, but I do think the company currently has "unlimited liabilities"

    This literally is a multistate, multicoast disaster. Hurricanes are coming too ... That's probably going to compound the damage further ...

  15. I probably feel slightly more comfortable putting in a bid at $5 or $7 per share for BPs stock, but for now, I wouldn't touch the stock.

  16. Investing in BP now in my eyes is a good idea. 3 months down the line this will pay off big.

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