The Share Centre rates BP as a 'buy' despite profit decline

28th Oct 2014 11:06

Investors willing to take on a little risk should consider shares of BP, according to The Share Centre, which recommended the stock as a 'buy' on Tuesday following the oil major's third-quarter results.BP reported that profits fell by almost a fifth in the third quarter, but it still beat the market's expectations and said it was "well on track" to hit its targets this year.Underlying replacement cost profit for the three months to 30 September totalled $3.04bn, down 18% on the $3.69bn earned in the same period last year as a result of the falling oil price."However, investors will be pleased to hear the company indicated that its joint venture with Rosneft, Russia's largest oil producer, was so far unaffected by sanctions which the market had feared would have an adverse impact," said The Share Centre's Sheridan Admans."These pressures, alongside currency translations, have deterred investors since the summer and have significantly impacted the share price."Admans said that those looking for capital growth and income should be 'buy' the stock, which trades "favourably against it peers" with a price-to-earnings multiple of just nine."However, the recent drop in the price of oil will certainly have a dampening effect on earnings as we have seen from today's results, so investors may wish to drip feed into the stock," she said.The shares were up 0.7% at 433.05p by 11:11.