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BP target price cut by Credit Suisse as it braces for “more difficult” second quarter

The price target drops to 360p per share, but its still based on US$60 per barrel Brent crude assumptions

BP PLC - BP downgraded by Credit Suisse bracing for “more difficult” second quarter

BP PLC (LON:BP. is set to follow a difficult first quarter with a more difficult second quarter, according to Credit Suisse, which today cut its target price for the oil giant.

The Swiss bank dropped its target to 360p, from 375p, whilst predicting the FTSE 100-listed major will fall into losses in the current three-month period.

READ: BP and Shell dividends in focus as banks fold

Rosneft - which pays into BP via dividends - will likely be loss-making, CS said in a note, whilst tax payments are set to be above prior expectations, and refining margins are expected to be weaker.

Credit Suisse forecasts earnings (group EBIT) at around US$1.9bn in the first quarter, down from US$4.3bn in the preceding three months, with upstream earnings dropping to US$1.3bn from US$2.7bn – and noted, based on BP’s rule-of-thumb, that quarter-on-quarter earnings would drop another US$1.2bn.

Production in upstream will reduce by around 100,000 barrels of oil per day, Credit Suisse said, because of planned maintenance and divestment.

The Credit Suisse price target is pegged to a Brent crude price assumption of US$60 per barrel.

In afternoon trading, BP shares were 3.5% lower at 329.15p.

Quick facts: BP PLC

Price: 319 GBX

Market: LSE
Market Cap: £64.67 billion

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