Repsol trading at more attractive ratios than rivals (PER 5,8x vs 11,7x)

Repsol's discovery in AlaskaRepsol project in Alaska.

Bankinter | Recomendation Buy and Objective Price 17,4€/share. The rise in oil prices and growth opportunities will drive the share price. Repsol will be driven by exogenous  (the sharp increase in oil prices benefits it directly – Brent YTD +39%) indigenous factors.

(i) Positive results for Q119, despite advancing maintenance stoppages in its refinery system and production cuts in Libya and Venezuela. (ii) High production levels.

(iii)  Strong business diversification, progressively moving towards ever cleaner energy. (iv) Generius shareholder remuneration (6%), and (v) trading at more attractive rates than its rivals (PER 2019 5.8X compared to average 11.7X for comparable companies.

As for valuation: we adopt a conservative approach and include in the valuation the principal risks it faces (Libya and Venezuela, crude price volatility and the possibility that Sacyr will reduce its holding).


About the Author

The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.