UK Stocks: BP Shares Gain on Reports of ADNOC’s Takeover Interest

In key news on UK stocks, BP PLC (GB:BP) shares gained over 3% today after Reuters reported that Abu Dhabi National Oil Company (ADNOC) was interested in making a takeover bid for the company. The UAE-owned oil company was in the early stages of discussions and later decided not to proceed. According to Reuters‘ sources, political factors posed challenges to the potential deal. After the news, BP shares gained 3.17% today as of writing.

BP is a multinational energy company involved in the exploration, production, and distribution of oil and natural gas.

BP in the Spotlight

The latest reports on BP’s acquisition highlight that even the major British giants are potential takeover targets. Investors and analysts believe that BP has underperformed in the industry over the last few years, making it a potential takeover target. Over the last five years, BP shares have just gained 5.8%.

Additionally, investors have reacted negatively to BP’s strategy to reduce fossil fuel production and its faster move towards renewables compared to its rivals. Consequently, in February 2023, BP announced that it would slow down its transition to lower-carbon energy, opting to allocate more funds to oil and gas production, which leads to more profits.

UBS analyst Joshua Stone stated that ADNOC’s action underscores the perception that the European oil and gas sector is currently undervalued. Two days before, Stone reiterated his Buy rating on BP stock after the company released its trading update for the first quarter of FY24, increasing its oil and gas production outlook.

Is BP a Good Share to Buy?

According to TipRanks consensus, BP stock has received a Moderate Buy rating based on eight Buys, one Hold, and one Sell recommendation from analysts. The BP share price forecast is 642.2p, which implies a growth rate of 20% at the current trading level.

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