JPMorgan forecasts strong Q3 for European oil and gas, favors Shell, BP, Eni

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Summary · why it matters

JPMorgan expects a stellar third-quarter earnings season for European oil and gas companies, led by refining, and favors U.K. supermajors Shell and BP, plus Eni, urging investors to be selective after the group's outperformance. Analysts led by Matthew Lofting wrote that macro still trumps micro, as faltering inventories across energy products and regions become harder to ignore while Middle East de-escalation remains elusive. After marking estimates to forward price strips, the team sees a 2027 free cash flow yield of 10.9% at $85 Brent, with earnings per share on average a mid-single-digit percentage above consensus. JPMorgan stays Overweight on Shell and BP and Neutral on TotalEnergies, and sees Shell's next quarterly buyback rising to $4 billion, while expecting BP's total financial obligations to drop $5 billion in the quarter with gearing improving by almost 400 basis points. The bank also remains Overweight Eni, forecasting a higher full-year buyback of €4 billion and special dividend capacity of up to €1 billion, or €0.31 per share, with gearing heading toward about 10% by year-end. Among midcaps, refining margins hit records of $35 to $40 a barrel in the third quarter, versus a mid-cycle level below $10, but have recently moderated to about $15, and JPMorgan stays Overweight Galp and Underweight OMV.

Impact on assets 7

Energy Transition & Power Demand▲
BP PLC
BP
▲ PositiveCapitalrelevance

JPMorgan stays Overweight BP, expecting total financial obligations to drop $5B and gearing to improve ~400bp.

Shell plc
SHEL
▲ PositiveCapitalrelevance

JPMorgan stays Overweight Shell and sees its next quarterly buyback rising to $4 billion.

Galp Energia Nom
0B67
▲ PositiveCapitalrelevance

JPMorgan stays Overweight Galp, citing record Q3 refining margins of $35-40/bbl.

Energy± Mixed
Eni S.p.A.
ENI
▲ PositiveCapitalrelevance

JPMorgan stays Overweight Eni, forecasting a higher full-year buyback of €4B and up to €1B special dividend.

OMV Aktiengesellschaft
OMV
▼ NegativeCapitalrelevance

JPMorgan stays Underweight OMV among midcaps despite record refining margins.

TotalEnergies SE
TTE
± MixedCapitalrelevance

JPMorgan stays Neutral on TotalEnergies, a neutral analyst stance versus Overweight ratings on Shell, BP, and Eni.

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