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Barclays reiterates BP is its 'top-pick' in the sector ahead of Q1 results
Barclays reiterated its endorsement of BP's shares as its 'top-pick' in the sector, noting how the sector had only performed 'in-line' with the wider market since the beginning of 2018, even as analysts had bumped up their profit estimates by 10%.
That, they said, appeared to them to be "inconsistent", leading them to reaffirm their 'positive' stance on the sector and their 'top-pick' stance on BP specifically with a target price of 675p.
Separately, Shell was kept at 'overweight' with a target price of 3,000p, alongside Total (target price: 60 and OMV (target price: 60).
The broker also noted how European Intergrated Oils tended to always miss analysts' consensus forecasts in the fourth quarter, only to beat them "strongly" in the first quarter.
"Following a weaker than expected set of 4Q results, we forecast 1Q earnings up 14% q/q, helped by the combination of a seasonally lower cost base, a higher oil price and better contribution from trading."
Barclays also said that refining margins at four-year lows would in many cases probably be offset by better petrochemical margins.