BP p.l.c. (BP – Research Report), the Energy sector company, was revisited by a Wall Street analyst today. Analyst Christopher Kuplent from Bank of America Securities maintained a Hold rating on the stock and has a p410.00 price target.
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Christopher Kuplent has given his Hold rating due to a combination of factors impacting BP p.l.c. A significant factor is the involvement of activist investor Elliott, which has built a notable stake in BP and is advocating for substantial changes within the company. While such demands are not new for BP, the presence of a known activist adds pressure on BP as it prepares for a crucial strategy update.
Another consideration is BP’s financial strategy, where capital allocation towards low-carbon initiatives is expected to decrease, but savings may be consumed by the need to stabilize its upstream oil and gas portfolio. This leaves little room for debt reduction and limits the potential for buyback strategies. Additionally, BP’s current valuation appears close to fair value, with its cash yield less appealing compared to competitors like Shell, especially considering BP’s higher gearing and breakeven oil price.
In another report released on February 7, RBC Capital also maintained a Hold rating on the stock with a £4.80 price target.