Bankinter | We view the update to the strategic plan positively. It involves a focus on strengthening the balance sheet, optimising investments and enhancing positioning in the Upstream, Industrial and Customer segments. Furthermore, it reinforces shareholder remuneration, which was already attractive. In our view, Repsol will also benefit from a positive environment for oil and gas, against a backdrop of heightened geopolitical tension and war in Iran, which works in its favour as it has no assets in the region and implies a rise in prices.
Repsol’s approximate break-even point is around $60–$65 per barrel of Brent crude, so a price environment above $80 allows for strong cash flow generation.
Furthermore, a potential merger of its US business, the strength of its balance sheet, high shareholder returns and the fact that it trades at attractive 2026e multiples (P/E 7.2x, Price/Book 0.8x and Enterprise Value/EBITDA 3.6x), lead us to maintain our Buy recommendation and raise our Target Price to €26.0 (upside potential of 20%), from the provisional €24.7 per share.
