Morgan Stanley upgrades European oil majors sector to 'attractive', favours higher-beta stocks

Galp Energia SGPS SA

25/03/2026 08:15

** Morgan Stanley upgrades the European oil majors sector to "attractive", shifting preference to higher-beta names as the oil market is unlikely to return to its pre-conflict regime

** It says the market has learned oil flow through the Strait of Hormuz can be cut off, creating a "Strait shock" that reduces global spare capacity

** It ups British BP BP.L, citing the ideal backdrop for its turnaround plan, and Norwegian Equinor EQNR.OL due to a tighter gas environment and a lack of Middle East exposure

** It swaps its mid-major preferences by upgrading Spain's Repsol REP.MC on expected higher 2026/27 buybacks while cutting Portugal's Galp GALP.LS as too defensive

** It also cuts Shell SHEL.L, arguing its defensive attributes offer less upside in a rising energy price environment

COMPANY
RATING
OLD RATING
PT
OLD PT
TotalEnergies
overweight
no change
EUR 88.3
EUR 67.8
BP
overweight
equal weight
GBp 619
GBp 447
Repsol
overweight
equal weight
EUR 28.0
EUR 20.0
Galp
equal weight
overweight
EUR 24.0
EUR 21.0
Shell
equal weight
overweight
GBp 3,589
GBp 2,971
Eni
equal weight
no change
EUR 25.3
EUR 17.2
Equinor
equal weight
underweight
NOK 388
NOK 228

(Reporting by Marta Serafinko in Gdansk)

((Marta.Serafinko@thomsonreuters.com; +48 58 769 66 00;))