Repsol S.A. shares are closing back in on major support levels around 11.02 EUR based on daily price data, which could offer attractive entry points.
Summary
● Overall, and from a short-term perspective, the company presents an interesting fundamental situation.
● The company has a good ESG score relative to its sector, according to MSCI.
Strengths
● The equity is one of the most attractive in the market with regard to earnings multiple-based valuation.
● The company is one of the most undervalued, with an "enterprise value to sales" ratio at 0.32 for the 2024 fiscal year.
● The company's share price in relation to its net book value makes it look relatively cheap.
● This company will be of major interest to investors in search of a high dividend stock.
● The difference between current prices and the average target price is rather important and implies a significant appreciation potential for the stock.
Weaknesses
● As estimated by analysts, this group is among those businesses with the lowest growth prospects.
● The company's currently anticipated earnings per share (EPS) growth for the next few years is a notable weakness.
● For the last twelve months, sales expectations have been significantly downgraded, which means that less important sales volumes are expected for the current fiscal year over the previous period.
● For the last four months, the sales outlook for the coming years has been revised downwards. No recovery of the group's activities is yet foreseen.
● For the last 12 months, analysts have been regularly downgrading their EPS expectations. Analysts predict worse results for the company against their predictions a year ago.
● For the last few months, analysts have been revising downwards their earnings forecast.
● The overall consensus opinion of analysts has deteriorated sharply over the past four months.
● Over the past twelve months, analysts' consensus has been significantly revised downwards.
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Repsol S.A. is one of the largest oil and gas groups in Spain. The activity is organized into four sectors:
- refining and distribution (No. 1 in Spain): 42.1 million tons of crude oil refined in 2023 and 26 million tons of oil products sold (kerosene, gasoline, fuel oil, gas liquefied petroleum gas, etc.). At the end of 2023, the group operated 6 refineries located in Spain (5) and Peru and a network of 4,524 service stations located in Spain (3,275), Peru (525), Portugal (517) and Mexico (207). Repsol S.A. also sells lubricants, aviation fuels, bitumen and specialty products (7,715 Kt sold in 2023), liquefied petroleum gas (1,192 Kt sold) and petrochemicals (1.9 Mt of products sold);
- production of electricity and distribution of natural gas: 8,718 GWh of electricity generated from renewable energy and 1,560 GWh of gas sold in 2023;
- liquefaction, transportation and regasification of natural gas;
- exploration and production of oil and natural gas: 599,000 barrels of hydrocarbons produced per day in 2023.
Net sales are distributed geographically as follows: Spain (56.8%), Peru (7.8%), the United States (6%), Portugal (5.2%) and other (24.2%).