BP PLC (LON:BP.) starts the third-quarter reporting season for the UK oil majors on Tuesday with both it and blue-chip peer Royal Dutch Shell PLC (LON:RDSA) - which reports on Thursday - likely to be bolstered by stronger oil prices.
Perhaps for the first time in a while, BP is being seen by investors as the preferred choice between the two UK-listed oil ‘super-majors’.
Last month, Morgan Stanley upgraded its stance for BP to ‘overweight’ whilst claiming that there would be a new cycle of building for major oilers.
“BP has underperformed in recent months as investors have digested the BHP acquisition,” Morgan Stanley analysts said in their upgrade note, referring to BP’s purchase of the miner’s US oil assets in August.
“Yet, the company increasingly stands out amongst European majors, offering the highest dividend yield and underappreciated FCF growth prospects,” they added.
Steady as she goes for Reckitt Benckiser
Elsewhere, third-quarter numbers from FTSE 100-listed consumer products giant Reckitt Benckiser Group PLC (LON:RB.) should show relatively steady earnings and cash flow stream.
In a preview, Graham Spooner, investment research analyst at The Share Centre said investors will be hoping that previously improved guidance on Reckitt’s sales growth will be maintained
Spooner noted that the company produces a number of well-known brands, including Dettol and Nurofen, among products that are generally considered as everyday necessities in developed markets and sales of these products will not vary hugely through the economic cycle.
He added: “Other areas to concentrate on will be costs, emerging market sales, and the performance of its foot care brand Scholl and recent acquisition Mead Johnson.”
Analysts at UBS forecast Reckitt reporting +3.7% organic sales growth in the third-quarter.
Significant events expected on Tuesday October 30:
Trading update: BP PLC (LON:BP.), Reckitt Benckiser Group PLC (LON:RB.), Hunting Plc (LON:HTG)
Finals: Proactis Holdings Plc (LON:PHD)
AGMs: ANGLE PLC (LON:AGL), Real Good Food PLC (LON:RGD), Scancell PLC (LON:SCLP)
Economic data: EU preliminary GDP; US S&P/Case-Shiller house price index