Inevitably, the CAC 40's biggest profit contributor is suffering from this year's fall in oil prices, with net income down 30% y-o-y.
Alongside this announcement, a note from Bank of America analysts pointed out that the group will struggle to self-finance both its investments and its returns to shareholders (dividends and share buybacks), expressing concern that debt could rise to critical levels.
MarketScreener points out that the group's management history completely refutes these concerns. Overall, TotalEnergies has generated €128bn in free cash flow over the last ten years. Out of this amount, €63bn was distributed in dividends and €18bn was used for share buybacks, net of new share issues.
As for net debt, despite its recent rebound, it remains perfectly in line with its historical average and at a very reasonable level of around one and a half times average operating profit over the last decade.
Beyond the current economic fluctuations, it should be noted that TotalEnergies' share price in 2025 is exactly the same as it was twenty years ago.
A quick look at the fundamentals quickly explains why. Earnings per share are expected to be $6.3 in 2025, compared to $5.2 in 2005. Its growth in current dollars is therefore very modest, and this does not even take inflation into account.
Similarly, neither daily production volume—around 2.5 million barrels of oil and equivalents per day—nor proven reserves—roughly 11 billion barrels and equivalents—have changed over the past twenty years.
In this respect, the fair price for TotalEnergies shares is primarily dictated by their dividend yield and the interest rate environment. In this regard, with a ten-year US Treasury bond yielding 4.4%, the current share price and its dividend yield of 6.2% – representing a risk premium of 1.8% – seem entirely fair, or at least not discounted.
Unless, of course, oil prices were to surge or collapse...
