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.

25 comments:

  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.

    ReplyDelete
  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.

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

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

    ReplyDelete
  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?

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

    ReplyDelete
  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 !

    ReplyDelete
  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.

    ReplyDelete
  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!

    ReplyDelete
  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.

    ReplyDelete
  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!

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

    ReplyDelete
  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?

    ReplyDelete
  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 ...

    ReplyDelete
  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.

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

    ReplyDelete
  17. Hi there! Someone in my Facebook group shared this website with us so I came to look it
    over. I'm definitely loving the information. I'm
    bookmarking and will be tweeting this to my followers!
    Terrific blog and excellent style and design.


    Have a look at my page - steinzeitdiät

    ReplyDelete
  18. hi!,I love your writing very so much! share we be in contact more
    about your article on AOL? I need an expert in this house to solve my problem.
    Maybe that's you! Taking a look forward to look you.

    Here is my site ... wordpress theme premium magazine

    ReplyDelete
  19. Hey! I know this is kinda off topic but I was wondering if you knew where
    I could get a captcha plugin for my comment
    form? I'm using the same blog platform as yours and I'm having difficulty finding one?
    Thanks a lot!

    Also visit my web page: themes blog wordpress
    Also see my site > premium wordpress themes

    ReplyDelete
  20. You actually make it seem so easy with your presentation but I find this matter to be
    actually something which I think I would never understand.
    It seems too complicated and very broad for me.
    I'm looking forward for your next post, I'll try to get the
    hang of it!

    My web blog ... low car
    Also see my site - low carb dinner

    ReplyDelete
  21. Thank you, I've just been searching for information approximately this subject for a while and yours is the best I've found
    out till now. However, what in regards to the conclusion?

    Are you certain in regards to the supply?

    Here is my web-site: bücher zum abnehmen

    ReplyDelete
  22. I blog quite often and I really thank you for
    your information. This great article has really peaked my interest.
    I will book mark your blog and keep checking for new information about once per week.
    I opted in for your RSS feed too.

    Visit my site: wordpress grundlagenkurse

    ReplyDelete
  23. Thanks for one's marvelous posting! I truly enjoyed reading it, you may be a great author. I will remember to bookmark your blog and may come back later on. I want to encourage continue your great work, have a nice weekend!

    Here is my weblog ... steinzeit diät
    my web page > bodybuilding low carb

    ReplyDelete
  24. You can certainly see your expertise within the article you write.

    The world hopes for more passionate writers such as you who are not
    afraid to say how they believe. All the time follow your heart.


    Here is my website; Teilkörpermassage
    my page - Fuss-Reflex-Massage

    ReplyDelete