Morgan Stanley| According to Repsol’s (REP) strategy plan for 2024-27, analysts not only see the company’s willingness to deliver a high capital distribution and dividend growth “better than the competition”, but also the ability to do so.
In this regard, they expect Repsol to generate an average FCF (post minority dividends) of €2.3bn per year, to be channelled into distributions, assuming an average value of €2.1-2.2bn over 2024-27e. In the near term, they further expect the stock to benefit from higher refining margins, which are significantly above expected YTD ahead of the historically strong second quarter (valuation made before Martijn raised its oil price target).
Repsol, Overweight, Target Price €18.50/share.
