Why is the Beach Energy (ASX:BPT) share price falling on Tuesday?

What’s up with Beach shares today?

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The S&P/ASX 200 Index (ASX: XJO) is having yet another day in the red so far this Tuesday. At the time of writing, the ASX 200 is down by 0.41% to 7,269 points. But the Beach Energy Ltd (ASX: BPT) share price is doing quite a bit worse.

Beach Energy shares are currently trading at $1.43 each, down 2.59% so far today. That’s vastly underperforming the broader markets.

So why are Beach shares being so badly punished this Tuesday?

Well, it’s not entirely clear. The usual culprit for a share price fall for an energy share like Beach is the crude oil price. As an oil driller, Beach’s profitability is directly impacted by the underlying price of crude oil.

But oil prices have been rising pretty steadily of late. My Fool colleague James just this morning discussed how prices were up overnight. As it currently stands, West Texas Intermediate (WTI) crude is trading at US$79.35 a barrel, while Brent is asking US$83.65. Both of those prices are pretty close to the top of their respective 52-week ranges.

Perhaps the answer is some good old-fashioned profit-taking. Beach shares have had a wild and volatile year, as you can see in the graph below:

Beach Energy share price
Beach Energy 1-year share price and data | Source: fool.com.au

But even so, the Beach share price is also up a very solid 38% over the past month. That includes a bump of around 2% just yesterday. Perhaps investors are seeing the current (and historically high) crude oil pricing and deciding to take some profits off the table.

About the Beach Energy share price

Although the Beach share price has had an amazing month to date, the picture doesn’t quite look as rosy if we zoom out a little. This oil company remains down 22% year to date, although it’s up 2.8% over the past 12 months.

Beach shares are also up 89% over the past 5 years but remain down close to 50% from the company’s all-time high of $2.77 or so that we saw back in January 2020.

At the current share price, Beach Energy has a market capitalisation of $3.25 billion, a price-to-earnings (P/E) ratio of 10.3 and a dividend yield of 1.4%.

Should you invest $1,000 in Beach Energy right now?

Before you consider Beach Energy, you'll want to hear this.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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