BP's Strategy Under Scrutiny as Elliott Pushes for Further Changes

BP plc BP, the UK-based energy major, is facing mounting pressure from activist investor Elliott Management, which has been meeting major shareholders to advocate deeper reforms, including cost cuts and potential leadership changes. The push came despite BP’s recent shift to hydrocarbons, following a strategy revamp last month.BP Faces Investor Scrutiny Over PerformanceBP has lagged rivals Shell and ExxonMobil over the past five years, a trend that many investors attribute to the company’s 2020 decision to prioritize renewables while scaling back oil and gas production. Although BP has since softened this stance, Elliott and other investors remain unconvinced that the company is making sufficient changes. Elliott, which holds an estimated 5% stake in BP, had previously led activist campaigns at Marathon Petroleum, Hess and Honeywell.Elliott Pushes BP for Cost Cuts and Asset SalesAccording to shareholders who attended meetings with Elliott, discussions have focused on reducing BP’s annual spending below $13 billion — lower than the current target of $13-$15 billion. BP has already committed to cutting costs by $4-$5 billion through 2027, but Elliott appears to be pushing for more aggressive measures.The activist investor has also suggested BP to sell a significant portion of its petrol station network and consider a full exit from renewable power generation. Currently, the company plans to divest $20 billion in assets by 2027 while increasing oil and gas investments and reducing net debt from $23 billion to a target range of $14-$18 billion.BP's Leadership Faces Key Vote in AprilBP has been actively engaging with shareholders, claiming that its new strategy has received broad support. However, Elliott’s push for change will be tested at BP’s annual general meeting on April 17, when investors will vote on whether to re-elect the company’s board, including chairman Helge Lund and CEO Murray Auchincloss.With Elliott seeking deeper reforms, the coming weeks could be critical in determining BP’s strategic direction and leadership stability.BP’s Zacks Rank & Key PicksBP currently carries a Zack Rank #3 (Hold).Investors interested in the energy sector may look at some better-ranked stocks like Archrock Inc. AROC, NextDecade Corporation NEXT and W&T Offshore, Inc. WTI. While Archrock presently sports a Zacks Rank #1 (Strong Buy), NextDecade and W&T Offshore carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.Archrock is an energy infrastructure company based in the United States with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.NextDecade is an emerging player in the LNG space with its Rio Grande LNG project in Texas. As demand for LNG continues to grow, the company’s strategic investments in infrastructure and planned liquefaction capacity provide strong upside potential. With the global LNG market expanding, NEXT is well-positioned to capitalize on the growing export demand from the United States.W&T Offshore leverages its strong Gulf of Mexico assets, which offer low decline rates and significant untapped reserves. The company recently expanded its portfolio with six shallow-water field acquisitions, adding substantial proven and probable reserves. Focused on high-return organic projects, WTI has maintained positive cash flows for 27 consecutive quarters.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report BP p.l.c. (BP): Free Stock Analysis Report W&T Offshore, Inc. (WTI): Free Stock Analysis Report Archrock, Inc. (AROC): Free Stock Analysis Report NextDecade Corporation (NEXT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks