BP
Note: This is a daily stock update and the information stands true as of 25/02/25, 09:00 CET.
Company update:
The shift in strategy is already widely expected and the recent recovery in share price is partially linked to that. While from a fundamental standpoint we like other stocks better (Total and Shell notably), the momentum is likely to keep being positive. Over the long run, we are still quite bullish on oil. Short term being long BP is attractive in our view.
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Company update:
BP’s upcoming investor day tomorrow isn’t just another corporate strategy update—it’s a high-stakes audition for CEO Murray Auchincloss, who now finds himself in the hot seat with activist heavyweight Elliott Management breathing down his neck.
1) We expect BP to dramatically U-turn on its oil and gas reduction targets, officially scrapping its commitment to lower production or even pledge to production hikes, a move that aligns it more with industry majors like TTE, Shell, Exxon and Chevron than its former green-energy ambitions.
In our view, investors burned by BP’s previous volume-based targets will likely welcome this return to fundamentals, but it’s not without friction—climate-conscious shareholders are already sharpening their pitchforks, demanding a say in any rollback of emissions goals.
2) Meanwhile, we expect Auchincloss to announce at least one major divestment to keep the wolves at bay, with Castrol, Marketing/Retail assets, U.S. shale assets (via IPO) and spinoffs in renewables all rumored to be potential options.
3) However, whether this “reset” is enough to pacify Elliott or merely fuels its next move—perhaps an executive shakeup, starting with BP’s chair.
If history is any guide, investors love an oil major that commits to hydrocarbons, and the 10% pop in BP’s stock after its 2023 strategy revision suggests they might cheer this pivot. But in a world where energy transition pressures won’t vanish overnight, Auchincloss will need more than just higher barrels per day—he’ll need a compelling long-term vision, or risk becoming the next name on Elliott’s hit list.
Expert opinion: The shift in strategy is already widely expected and the recent recovery in share price is partially linked to that. While from a fundamental standpoint we like other stocks better (Total and Shell notably), the momentum is likely to keep being positive. Over the long run, we are still quite bullish on oil. Short term being long BP is attractive in our view.
For daily updates, subscribe to our newsletter and for detailed information, reach out to us at sales@alphavalue.eu
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Alphavalue Morning Market Tip
Solid start of 2025 with signs of recovery in key markets.