Bankinter | Repsol could launch two hefty investments in renewables in the US. Specifically, according to press reports, it would be two projects in Texas for 1.200 MW. The investments are calculated to reach 800 million euros (investments forecast for the whole year are approximately 4 billion euros). Repsol has significant Exploration and Production assets in Pennsylvania, Texas, the Gulf of Mexico and Alaska. But this move would mean positioning itself in Renewables as well.
Bankinter analyst team’s view:
If the news is confirmed, it would be positive because it would allow for the following:
i) Increase its position in renewables. We recall that Repsol’s main objective is to become a multi-energy company, reducing its dependance on oil and gas.
ii) Geographical diversification and increased positioning in a country with lower risk.
iii) It would benefit from fiscal incentives for these investments launched in the US.
We reiterate our Buy recommendation. Repsol presented solid Q3 2022 results, which included a hike in profits, strong cash generation and debt reduction. Whatsmore, it will raise its shareholder remuneration in 2023 (+11%) and will amortise 200M/shares over the year as a whole.
Repsol: Buy, T.P. 16,1 euros/share.
