For the better part of the last half-decade, Gulf Keystone Petroleum (GKP) has recorded high profits and increased revenue streams, attracting a significant number of long-term investors. While other stocks continue to tank following the looming coronavirus pandemic, the valuation of GKP shares has risen drastically.
Over the past three months, the GKP share price has increased by over 9.6%, with the current trading price standing at GBX 108.2. This has thrown investors into a dilemma of whether to buy, sell, or hold the stock.
However, the question that every trader is asking is, for how long will the GKP share price run last? This post provides insights into the GKP share price news, with a breakdown of historical, current, and projected trends in the company’s stocks.
Gulf Keystone Petroleum in Brief
Gulf Keystone is an independent gas and oil production and exploration company, founded by private equity firms from Kuwait, UAE, and the United States. The company operates in Iraq’s Kurdistan region, from which it operates the world-class oil field of Shaikan. In 2004, Gulf Keystone Petroleum was listed in the primary market of the London Stock Exchange.
The Volatility of GKP Stocks
The 10-year GKP history report reflects the rapid volatility of the company’s share price. Over this period, GKP shares have yielded relatively high returns and significant losses in equal measure. In 2017, for example, the plan to improve the company’s oil price outlook led to a rise in the valuation of GKP share price by over 200%.
However, the larger part of 2017 saw a significant decline in GKP stock valuation. In 2012, investors and traders experienced one of the best investment cycles, as the GKP stocks spiked to the top of the company’s share price ladder.
This run in the GKP share price poses serious threats to some traders, while for others, it is a great investment opportunity.
The 2020 GKP Share Price Run
In the first three months into 2020, long-term investors who held GKP stocks for 5 years saw their investments tank to 98%. This followed an announcement by the oil producer on the sharp drop in their profits as the drop in oil prices weighed on the company’s performance.
In response to the downward movement in the oil prices, Gulf Keystone has taken on measures that aim at supporting liquidity. For example, the company announced suspending guidance for 2020, as well as stopping any expansion activity.
GKP pursues to navigate the challenges posed by low oil price levels by limiting its capital investments, lowering the cost of its production base, and maintaining a strong balance sheet.
After the declaration of coronavirus as a global pandemic by the World Health Organization (WHO) in mid-March, the Gulf Keystone share price has been on the rise. The sudden growth in the company’s stocks has left investors wondering which investment decision to make next.
This run in the GKP share price has made it difficult for traders to assess the company’s strengths and weaknesses. Investors and traders must, therefore, carry out fundamental and technical analyses on the company before trading the GKP shares.
How long Will the Run Last?
The analytical experts of G.K.P stocks suggest that the company’s share price is likely to continue performing well in the next one year. Based on a consensus recommendation of ‘Buy’ by four Wall Street analysts, the Gulf Keystone shares (LSE GKP) have received 4 Buy ratings.
This means that stock analysts are quite positive about the performance and outlook of the G.K.P stocks. But what is the implication of this analytical review? Such reports by analysts can act as useful guides on what investors should expect soon. But that is not all that there is for a long-term investor.
There are plenty of factors surrounding the performance of the G.K.P share price, and investors must not solely rely on a consensus recommendation by analysts to decide. So how can you tell whether the run will last for long? Here are some fundamental aspects to take into consideration.
When it comes to forecasting the performance of stocks, price targets can be more useful than ratings issued by analysts. This is because price targets are thoughtfully formulated models that investors consider to be reasonably valued, unlike the opinion-based ratings. Analysts have released 12-month price targets for the GKP stocks (GKP LSE).
According to their projections, G.K.P’s share price will range between GBX 210 and GBX 392 in the next one year. On average, analysts anticipate the traded price of G.K.P stocks to reach GBX 301. This is a potential 178.2% rise from the current share price. This means that there is a high likelihood of the price run lasting for over 12 months.
The attention of media on specific stocks has a significant impact on the stock’s share price. For the past one week, GKP stocks have been trending positively in every LSE discussion board. Notably, a report by InfoTrie Sentiment shows a news impact of 2.7 ratings on GKP stocks.
InfoTrie is a research group that analyses over 6000 sources of news to determine the sentiment of news coverage of public companies. The research group employs a scale of -5 to 5 to rank the news favorability of a stock.
With a rating of 2.7 on the firm’s scale, GKP’s share price has not been negatively impacted by news coverage. This means that the company’s stocks are unlikely to suffer from news coverage in the next couple of weeks, suggesting a continued run in the share price.
Declaration of Dividend Yield
Declaration of a stock’s dividend yield tends to trigger a spike in its share price. The recent dividend declaration by G.K.P in September last year indicated a rise in the yield per share to GBX 0.15 from GBX 0.07. The new yield stands at 4.94%, which is likely to cause growth in the G.K.P stock prices in the foreseeable future. Investors can expect the price run to continue for the next few quarters.
Although GKP stocks have experienced irregular volatility in the last decade, investors using these securities for diversification purpose only have managed to cushion their investments.
Fortunately, the recent performance trends in the GKP share price suggests a brighter future for both long-term and short-term investors. Various factors, such as the declaration of dividend yield, news coverage, and price targets, point to a continued rise in the company’s share price.
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