** "A time for reflection," RBC says on European and U.S. energy majors as it sees earnings drivers normalising after a nearly three-year period of exceptional growth
** It prefers upstream-heavy companies such as Shell SHEL.L, Eni ENI.MI, Chevron CVX.N, Galp Energia GALP.LS over "downstream" ones, in light of weaker product demand
** It expects share buybacks cuts across most companies, with the most significant reductions into 2025 from BP BP.L and Repsol REP.MC
** The broker's updated sector earnings estimates sit 8-15% below consensus on average in 2024-25, with greater downside for companies exposed to weaker refining margins like Exxon Mobil XOM.N, Repsol, Galp Energia
** It cuts Aker BP AKRBP.OL to "underperform" from "sector perform" on high capex, declining production in its largest field Johan Sverdrup from Q1 2025 onwards
** It notes Aker BP's ambition to grow dividend by 5% yearly, but expects it to remain unchanged as debt moves marginally higher
COMPANY |
NEW RATING |
OLD RATING |
NEW PT |
OLD PT |
|---|---|---|---|---|
Aker BP |
underperform |
sector perform |
NOK 220 |
NOK 330 |
BP |
sector perform |
no change |
GBP 525 |
GBP 550 |
Totalenergies |
sector perform |
no change |
EUR 75 |
EUR 70 |
Repsol |
sector perform |
no change |
EUR 14 |
EUR 16 |
Equinor |
sector perform |
no change |
NOK 270 |
NOK 300 |
Exxon Mobil |
sector perform |
no change |
$120 |
$135 |
Neste |
sector perform |
no change |
EUR 21 |
no change |
Saudi Aramco |
sector perform |
no change |
SAR 32 |
SAR 36 |
Shell |
outperform |
no change |
GBP 3,500 |
GBP 3,400 |
Eni |
outperform |
no change |
EUR 18 |
no change |
Galp Energia |
outperform |
no change |
EUR 25 |
no change |
Chevron |
outperform |
no change |
$170 |
$180 |
Var energi |
outperform |
no change |
NOK 44 |
NOK 53 |
(Reporting by Anna Chaberska)