After Hours Summary: ODD +20.9%, FRSH +11.3%, QRVO +9%, STX +9% higher on earnings; TENB -17.8%, SMCI -15.6%, SNAP -14.1%, FSLR -9.1%, SBUX -6.1%, BKNG -3% lower on earnings/guidance
After Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: ODD +20.9%, ORN +17.7%, JAKK +15.1%, FRSH +11.3%, RCKY +9.8%, QRVO +9%, STX +9%, LFUS +8.7%, ETWO +8.6%, BBIO +7.3%, TTI +6.9%, OI +6.6%, FLS +6.5%, NOG +6.3%, CLW +5.7%, NBR +5.2%, SIMO +4.1%, LRN +3.7%, TX +3%, ROG +2.9%, QUAD +2.9%, CWH +2.3%, MIR +2.2%, CZR +1.9%, MDLZ +1.7%, SAGE +1.7%, APAM +1.1%, STAG +1%, HURN +0.8%, ENSG +0.7%, MSA +0.7%, ENVA +0.6%, AKR +0.1%, BHE +0.1%, PPG +0.1%, VLTO +0.1%, JBGS +0.1%
Companies trading higher in after hours in reaction to news: ABVX +5.3% (completes enrollment for Phase 3 ABTECT trials), NVCT +4.3% (provides poster presentation highlights for NXP900), SVCO +2.3% (acquires Tech-X), XNCR +1.4% (reports results from first-in-human study of XmAb942), MRTN +0.8% (Director bought 20000 shares), NFGC +0.5% (announces new drill results), BX +0.2% (exploring $3 bln sale of Sphera, according to Reuters), NTRA +0.1% (announces results of its DEFINE-HT clinical trial)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: TENB -17.8%, SMCI -15.6%, SNAP -14.1%, HRZN -10%, VICR -9.5%, FSLR -9.1%, RBBN -8.8%, UNM -7.9%, HI -6.1%, SBUX -6.1%, LC -5.1% (also acquires IP behind Cushion), WERN -4.9%, KAI -4.8%, FIBK -4.7%, BKNG -3%, FICO -2.9%, FYBR -2.8%, OKE -2.6%, V -1.8% (also authorizes new $30 bln share repurchase program), BXP -1.7%, ESS -1.5%, EIX -1.2%, CSGP -0.8%, UMBF -0.8%, SON -0.5%, ACGL -0.1%, ESRT -0.1%
Companies trading lower in after hours in reaction to news: EXPE -2.4% (in sympathy with weak BKNG earnings), ABNB -2.2% (in sympathy with weak BKNG earnings), NVDA -1.9% (in sympathy with weak SMCI guidance), AIN -1.8% (wins Bell Textron contract), ACEL -1% (CFO resigns), OUST -0.9% (names new CFO), AREN -0.8% (settles litigation with Authentic Brands), LI -0.3% (CE and LI to collaborate on joint initiative to launch ultra-low emission material), DJT -0.3% (publishes letter to shareholders), CWAN -0.1% (names new COO), GVA -0.1% (wins $38 mln CDOT contract), MTAL -0.1% (provides Q1 update)
Elliott’s activist bet on BP goes from slick to slippery
Oil major’s turnaround depends to some extent on the world remaining relatively predictable
Activist investors start with a simple enough idea: take an underperforming company, sometimes with too much debt. Push it to slim down. Hammer its remaining business into reasonable shape. And then enjoy a veritable gush of cash. That is a reasonable description of Elliott’s bet on beleaguered oil major BP. Yet sometimes the universe has other ideas.
BP reported earnings on Tuesday that were half what they were a year ago. That wasn’t because of the oil price, which was $65 a barrel on Tuesday, down from around $80 on average in 2024. Instead, the group was hit by lower profits from trading gas.
Still, the oil price matters. A handy rule of thumb sees BP losing $340mn of annual operating profit for every dollar off oil. Should Tuesday’s spot price be the average for the year, that alone would lop $5bn off last year’s underlying operating profit of almost $21bn. The shares are now down by a quarter compared with where they were in February, when Elliott popped up with a stake.
True, BP is hardly the only oil major to be hit by falling oil prices. And Elliott has hedged some of the so-called macro risk by shorting shares in rivals Shell and TotalEnergies.
But that still leaves Elliott, or any investor, exposed to some specific risks. First, BP has lots of debt — $27bn at the end of the first quarter, net of cash — though that number has been pushed up by temporary factors. Adding in hybrid bonds, an all-in figure is likely closer to $44bn, thinks Citigroup, or more than twice last year’s cash flow. That makes it particularly sensitive to oil price moves.
The second issue is that, to some extent, BP’s turnaround depends on the world remaining relatively predictable. Much of the expected value creation comes from the roughly $20bn of assets that it plans to sell by 2027. BP has made a solid start on this, signing agreements worth $1.5bn so far this year. But on-off tariff uncertainty has shrivelled the appetite for M&A, which may make it hard for BP to get top dollar for its wares.
Moreover, BP is trying to pivot back to oil and gas after its foray into renewables, but its high debt levels also dictate the pace. A burdened balance sheet, for instance, limits the company’s ability to acquire small oil and gas companies to replace its reserves, which dropped 13 per cent between 2022 and 2024.
BP boss Murray Auchincloss isn’t powerless amid the turmoil. He has trimmed investments and has plans to do more. Elliott, meanwhile, wants him to go even further — which is easier to do when times are bleak. The deeper the oil price sinks, the longer and harder BP will have to dig.
Should You Buy a Stock Targeted by an Activist Investor?
Any bump in a stock price driven by an activist investor evaporates within a year, and even early gains aren’t as robust as they once were
Key Points
- Activist investing carries high risk/reward.
- Gains from following activist campaigns dissipate within 12 months of the campaign’s announcement.
- Campaigns resulting in a company sale drive excess returns, but failed campaigns quickly turn returns negative.
Activist investing—where an investor buys up a large amount of a company’s shares and then pushes the company to make changes to its board or operations—is a high-risk and potentially high-reward proposition.
For billionaire investors like Carl Icahn, Bill Ackman and Dan Loeb, it has been especially lucrative over the years, despite some high-profile misses. But should the strategy be one that the average investor follows?
In short: While following an activist campaign can add a temporary boost to your portfolio value, the gains dissipate over the 12 months following the campaign.
To conduct our research, my assistants (Richard Tamirisa and Luigi Bilibio) pulled all activist campaigns against U.S. companies over the past 10 years. To be included in the sample, the activist must have either issued a 13D securities filing (which signals intent of some sort of activist campaign) or acquired a stake of greater than 1% and publicly disclosed an activist campaign against the company.
With this data set, we then looked at a company’s returns in the day before, the day of and the day after an activist announcement and then the one-year returns. For all returns, we looked at excess returns where we subtracted the returns of the S&P 500 to normalize returns for all market conditions.
Diminishing returns
The first interesting finding is that jumping in early when a campaign is announced used to be more profitable than it is today. For instance, the median excess returns during the three-day window surrounding the announcement of an activist campaign was 0.21 percentage point from 2015 to 2019. That median excess return has dropped to minus 0.06 percentage point from 2020 to 2025.
We see a similar story with average returns, where the average excess return was 0.46 percentage point from 2015 to 2019 but has fallen to 0.34 percentage point from 2020 to 2025.
When we look at the one-year returns, we also find some interesting results: Namely, most of the returns an investor can extract by following an activist campaign come in the first two to three months. The median peak excess returns for an activist campaign occur two months after an announcement, at around 2 percentage points. After month two, excess returns dissipate and go negative by month five.
When we look at average excess returns, we see a similar but amplified dynamic. Average cumulative excess returns following a campaign plateau around month two to month six at 5.3 percentage points, but then dip by month 12.
Skewed results
These differences between average returns and median returns highlight that it is just a few activist campaigns that are driving most of the excess returns. Drilling down into the data, we see that it is the activist campaigns that result in a company sale that drive a lot of the excess returns—as was the case when an activist campaign by Barry Rosenstein’s Jana Partners forced the sale of Vonage Holdings to Ericsson for a 50%-plus gain for the activist.
And investors should know that this strategy of following an activist campaign does come with risks. If an activist campaign fails—for instance, if the sale of a company isn’t achieved—then we note that returns can quickly evaporate or turn negative.
In sum, if you are looking to juice your portfolio returns by following an activist investor campaign, you may be able to achieve some excess returns over the first few months after buying into a campaign. Beyond that brief period, you are subject to significant downside risk if the activist campaign goes belly up.
Research Calls I
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Upgrades
- Chord Energy (CHRD) upgraded to Buy from Neutral at BofA Securities, tgt $114
- Crane (CR) upgraded to Buy from Neutral at UBS, tgt $190
- Diamondback Energy (FANG) upgraded to Buy from Neutral at BofA Securities; tgt $170
- Upstart (UPST) upgraded to Neutral from Underperform at BofA Securities, tgt $53
- Chord Energy (CHRD) upgraded to Buy from Neutral at BofA Securities, tgt $114
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Downgrades
- Air Liquide (AIQUY) downgraded to Neutral from Overweight at JPMorgan
- Avantor (AVTR) downgraded to Neutral from Buy at Goldman, tgt $14
- Builders FirstSource (BLDR) downgraded to Hold from Buy at Stifel, tgt $125
- ConocoPhillips (COP) downgraded to Neutral from Buy at BofA Securities; tgt $107
- Hims & Hers (HIMS) downgraded to Hold from Buy at TD Cowen, tgt $30
- Icon (ICLR) downgraded to Neutral from Overweight at JPMorgan, tgt $150
- InMode (INMD) downgraded to Neutral from Buy at BTIG Research
- Insulet (PODD) downgraded to Peer Perform from Outperform at Wolfe Research
- Lufax (LU) downgraded to Sell from Hold at Deutsche Bank, tgt $2.40
- LVMH (LVMUY) downgraded to Neutral from Outperform at BNP Paribas Exane
- National Grid (NGG) downgraded to Neutral from Buy at UBS
- Volaris (VLRS) downgraded to Equal Weight from Overweight at Morgan Stanley, tgt $4.40
- Volaris (VLRS) downgraded to Equal Weight from Overweight at Barclays, tgt $4.50
- Air Liquide (AIQUY) downgraded to Neutral from Overweight at JPMorgan
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Others
- Apellis (APLS) initiated with an Overweight at Cantor Fitzgerald, tgt $44
- Astria Therapeutics (ATXS) initiated with an Overweight at Cantor Fitzgerald, tgt $47
- BioCryst (BCRX) initiated with an Overweight at Cantor Fitzgerald, tgt $20
- InflaRx (IFRX) initiated with an Overweight at Cantor Fitzgerald, tgt $10
- Kinetik Holdings (KNTK) initiated with a Neutral at UBS, tgt $49
- Korro Bio (KRRO) initiated with an Overweight at Cantor Fitzgerald, tgt $74
- Matson (MATX) initiated with a Buy at Jefferies, tgt $125
- Pharvaris (PHVS) initiated with an Overweight at Cantor Fitzgerald, tgt $28
- ProQR Therapeutics (PRQR) assumed with an Overweight at Cantor Fitzgerald, tgt $8
- ProQR Therapeutics (PRQR) initiated with an Outperform at Evercore ISI, tgt $5
- Qualcomm (QCOM) resumed with an Overweight at JP Morgan; tgt lowered to $185
- Strategy (MSTR) initiated with a Buy at H.C. Wainwright, tgt $480
- Viking Therapeutics (VKTX) initiated with an Overweight at Cantor Fitzgerald, tgt $104
- Wave Life Sciences (WVE) initiated with an Overweight at Cantor Fitzgerald, tgt $10
- Apellis (APLS) initiated with an Overweight at Cantor Fitzgerald, tgt $44
Early premarket gappers
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Gapping up:
- VRNA +15.4%, LEG +15%, BYON +14.6%, ABEO +14%, NE +9.6%, ATOM +7.2%, PII +7%, CCK +6.2%, UPS +5.1%, HON +5.1%, LTM +4.7%, OKTA +4.6%, ORIC +4.3%, TWO +3.2%, DB +3.1%, CLVT +3.1%, TVTX +3%, TER +3%, CR +2.9%, ARCB +2.9%, WWD +2.8%, CDP +2.7%, SSD +2.6%, WFRD +2.5%, PTLO +2.2%, SEB +2%, TLX +1.9%, HSBC +1.7%, BRX +1.5%, NVS +1.5%, WELL +1.3%, AMKR +1.3%, GD +1.1%
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Gapping down:
- TLSI -12.4%, UCTT -10.3%, NXPI -8.3%, SANM -5.2%, CNO -4.8%, FHTX -4.6%, FTK -4.2%, KFRC -4.1%, BP -3.9%, ARMN -3.7%, SBSI -3.5%, HLIT -3.2%, NRIX -2.4%, UHS -2.2%, HLT -2.2%, WM -1.9%, NOV -1.9%, AZN -1.9%, DESP -1.9%, EPD -1.2%, ARCC -1.1%