Oil and natural gas giant BP (BP) is reportedly searching for buyers interested in a stake in its U.S. natural gas pipeline network as part of an ongoing effort to reduce debt and generate additional funds. That could see BP sell up to a 49% stake in the business, bringing with it a potential $3 billion price tag.
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BP likely hopes that the sale of this stake will help shore up its sliding share price. The stock is down 13.14% year-to-date, with its 12-month performance showing an 11.37% drop. Today’s news brings an additional 1.53% decline for BP shares.
BP Pins Hopes on Stake Sales
It’s not just its U.S. natural gas pipeline network that BP is hoping to sell a stake in. There are also plans to sell a stake in Lightsource BP, the company’s solar power unit, as well as in its U.S.-based wind power unit. Investors are also waiting for BP CEO Murray Auchincloss to update the company’s strategy in February, which could include confirmed stake sale plans and other business changes.
All of these sale plans come at a time when the energy sector is struggling. Behind that are ongoing economic headwinds, green energy transition plans that could result in oil demand dropping to 80 million per day by 2035, and regulatory troubles. That’s also resulted in a rising number of consolidations as companies band together to better operate in this difficult environment.
Is BP Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for BP is Moderate Buy based on two Buy ratings and four Hold ratings over the last three months. With that comes an average price target of $36.83, a high of $42, and a low of $33. This represents a potential upside of 26.39% for BP shares.
