UBS Names Five European Energy Stocks to Buy as Refining Margins Jump 83%

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3▲5 ▼0Impact / 5
Summary · why it matters

UBS rates five of the eight European energy stocks it covers as "buy" in a Q3 earnings preview, saying oil, gas and refining margins have all trended above consensus and refining margins jumped 83% in a quarter. The broker's Q3 net income estimates are 12% above consensus on average, and it raised its Brent forecast to $100/bl for Q4 while making no rating changes. For BP, UBS lifted its price target to 700p from 675p against a 558p share price, forecasting Q3 adjusted net income of $5.70 billion, 6% above consensus, and cash flow ex-working capital of $10.87 billion, 10% above, with net debt down $4.5 billion; BP reports on 30 October. TotalEnergies saw its target rise to €89 from €88 against a €74.5 share price, with UBS expecting Q3 adjusted net income of $8.63 billion, 16% above consensus, and cash flow ex-working capital of $12.36 billion, 25% above, the widest gap in the group, ahead of results on 29 October. Eni's target rose to €30 from €28 against a €24.2 share price, with Q3 net income of €2.42 billion essentially in line with consensus and 2026E EPS 26% above, plus assumed buybacks of €3.8 billion and a special dividend of about €1 billion; Eni reports on 23 October. Galp's €25 target was unchanged against a €21.7 share price, with Q3 net income forecast at €654 million, 22% above consensus, and cash flow of €956 million, 14% above, ahead of its 26 October report. OMV's target rose 13% to €77 from €68 against a €70.5 share price, with Q3 net income expected at €1.07 billion, 3% above consensus, and cash flow 5% above; OMV reports on 29 October.

Impact on assets 6

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

UBS lifted Eni's target to €30 from €28, with 2026E EPS 26% above consensus plus assumed €3.8 billion buybacks and a ~€1 billion special dividend.

TotalEnergies SE
TTE
▲ PositiveCapitalrelevance

UBS lifted TotalEnergies' target to €89 from €88, expecting Q3 adjusted net income 16% above consensus and cash flow 25% above, the widest gap in the group.

OMV Aktiengesellschaft
OMV
▲ PositiveCapitalrelevance

UBS raised OMV's price target 13% to €77 from €68 and expects Q3 net income 3% above consensus ahead of its 29 October report.

Energy Transition & Power Demand▲
BP PLC
BP
▲ PositiveCapitalrelevance

UBS raised BP's price target to 700p from 675p and forecasts Q3 adjusted net income 6% above consensus with net debt down $4.5 billion.

Galp Energia Nom
0B67
▲ PositiveCapitalrelevance

UBS keeps €25 target on Galp and forecasts Q3 net income 22% above consensus and cash flow 14% above, ahead of its 26 October report.

Financials▲