In the past month, BP shares are up 16%, outpacing both the Dow and other oil giants. Now that the worst of the oil spill is over, BP has appeal for investors as a cash-flow and profit machine with decent future prospects.
Several media have reported that BP will increase its target for asset sales to as high as $40 billion. This almost certainly mean disposing of its aging oil field holdings in Prudhoe Bay, Alaska, which may be worth as much as $20 billion.
Investors got an early jump on BP's earnings announcement, sending the stock about 4% higher in Monday in a positive reaction to the oil giant's anticipated ouster of CEO Tony Hayward in favor of Gulf cleanup czar Bob Dudley.
When voices such as the Financial Times and Warren Buffett call for an overhaul of top management, including Chairman Svanberg and CEO Hayward, it's time to listen. BP won't regain investors' confidence until it does so.
The oil spill in the Gulf of Mexico is taking a bigger bite out of BP's bottom line, according to a report issued Wednesday by analysts for Sanford C. Bernstein that hikes the oil company's cost to $33 billion.
In addition to allaying fears about dilution, BP has have managed to find support from several analysts, including one at Royal Bank of Scotland who upgrade a stock recommendation to buy from hold on Tuesday.
As strange as it sounds, shares in beleaguered oil spiller BP both fell and rose in Tuesday trading. They lost 1.7% in London, BP's home stock exchange. But they jumped 2.3% in New York, where BP's American depositary shares are traded.
Members of BP's employee savings plan are suing the oil giant over losses tied to the company's plunging stock price. They claim BP "knew or should have known" that its equity was "an imprudent investment of the ESP's assets."
Despite the company's massive oil spill, just weeks ago analysts were solidly behind BP's stock. Now, they're looking at the seemingly unending stream of bad news and rising costs and having second thoughts.
John Authers of the Financial Times thinks the BP stock sell-off may be overdone. But he also notes that public anger, political pressure and new regulations could have wider implications over the long term.