BP PLC (BP) is reportedly considering selling its lubricants division, Castrol, amid growing pressure from activist investor Elliott Management for strategic changes. Bloomberg, citing sources, values the unit at around $10 billion in a sale. Castrol, a longtime strong performer in its downstream business, is globally recognized through NBA, WNBA, and motorsports partnerships.
Discover the Best Stocks and Maximize Your Portfolio:
- See what stocks are receiving strong buy ratings from top-rated analysts.
- Filter, analyze, and streamline your search for investment opportunities with TipRanks’ Stock Screener.
Elliott Pressures BP for Bold Overhaul
BP’s potential divestment signals another major shift in its portfolio strategy as Elliott pushes for transformation. Last week, Reuters reported that Elliott, after acquiring a 5% stake in BP worth $4.75 billion, is urging the company to scale back renewables and prioritize fossil fuels to align its strategy with other oil majors like Shell (SHEL).
Consequently, Elliott Management has identified multiple assets, including the lubricants unit, for potential divestments. RBC Capital analysts believe that Elliot’s push for a more aggressive strategy may drive BP to sell or spin off its lubricants, U.S. shale, and fuel marketing businesses.
Meanwhile, BP is evaluating various options for its lubricants unit, including a potential sale, though no final decision has been made. Sources suggest BP may announce the divestment at its capital markets day on February 26.
BP Shareholders Push for Vote on Climate Policy Revisions
In a separate news report by the Financial Times, 48 institutional investors are urging BP to allow shareholders to vote on any decision to scale back its climate goals, potentially setting up a clash with Elliott.
Major BP investors, including Rathbones Investment Management (GB:RAT), Phoenix Group (GB:PHNX), Robeco, and Royal London Asset Management, have stepped in with their concerns about the company. This happened after BP’s CEO, Murray Auchincloss, promised to overhaul the company’s business plan after the push from Elliot.
Is BP Stock a Good Buy Now?
According to TipRanks consensus, BP stock has received a Moderate Buy rating based on five Buy, six Hold, and one Sell recommendations from analysts. The BP share price forecast is $37.58, which implies a growth rate of 6.43% at the current trading level.
