RBC expects tight energy markets to stay in 2023, cuts ENI, Galp

Big Sky Industrial

14/12/2022 09:38

** RBC expects European and U.S. energy markets to remain
tight in 2023, saying an uncertain investment outlook and market
intervention are likely to do more harm than good for investment
levels
    ** The broker estimates EPS moderately ahead of consensus
(about +13% on average) next year, with refined products
potentially driving material earnings revisions
    ** RBC prefers "outperform"-rated Repsol  REP.MC  and ups
its target price by 5% to 20 euros, pointing to the company's
40% cash flow from operations not strictly allocated to
dividends, capex or buybacks 
    ** Shell  SHEL.L  and BP  BP.L  are its other preferred
names in the sector, thanks to their stable capex numbers
    ** It cuts Italy's Eni  ENI.MI  and Portugal's Galp
 GALP.LS  to "sector perform" from "outperform", citing their
relatively balanced risk-reward ratio compared to peers
    ** The European oil and gas index  .SXEP  has risen 26.68%
since the start of the year
($1 = 0.9403 euros)