Elliott Management has expanded its investment in BP (BP, Financial) to above 5%, signaling a push for the energy giant to enhance its financial efficiency. The hedge fund is advocating for a significant reduction in BP's expenditure, with the aim of boosting the company's free cash flow by 40%.
Despite BP CEO Murray Auchincloss outlining a strategic plan for a "fundamental reset" earlier this year, Elliott Management believes these measures are insufficient. The hedge fund has proposed an alternative strategy that shifts BP’s focus towards maximizing free cash flow generation, targeting $20 billion annually by 2027.
This strategic pivot involves moving away from expanding BP’s oil and gas operations. Elliott's new plan underscores a reallocation of resources to prioritize shareholder returns and financial stability in the face of evolving industry dynamics.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 15 analysts, the average target price for BP PLC (BP, Financial) is $35.29 with a high estimate of $44.00 and a low estimate of $27.00. The average target implies an upside of 22.99% from the current price of $28.69. More detailed estimate data can be found on the BP PLC (BP) Forecast page.
Based on the consensus recommendation from 18 brokerage firms, BP PLC's (BP, Financial) average brokerage recommendation is currently 2.5, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for BP PLC (BP, Financial) in one year is $35.51, suggesting a upside of 23.77% from the current price of $28.69. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the BP PLC (BP) Summary page.
