He highlights that the rise in the group’s shares “has barely begun”
MADRID, 17 May. (EUROPA PRESS) –
Bank of America (BofA) has shot up its target price for Repsol by almost 32% and has raised it to 19.1 euros per share, compared to the previous 14.5 euros, considering that the rise in shares “has barely started”.
In a report, the bank’s analysts, who raise their recommendation to ‘buy’ for Repsol, indicated that the group led by Josu Jon Imaz “is better positioned” to benefit from “strong” refining margins, chemical products and of Henry Hub gas (reference in the United States).
Repsol shares rose strongly on the Ibex 35, driven by this Bank of America report, gaining 2.41% at 2.22 pm, to 14.46 euros. So far in 2022, the titles of the energy company chaired by Antonio Brufau have risen almost 40%.
The bank noted that refining margins will continue to surprise “positively”, which, together with Repsol appearing to be “perfectly positioned” to benefit from “solid” margins in chemicals and higher gas prices in the United States, allow estimating an increase in the group’s net income in 2022 (42%) and 2023 (17%).
With this very positive scenario, he also predicted an increase in the total return potential for Repsol shareholders, also allowing the company to deleverage faster in the sector, with a drop in leverage from 17% at the end of 2021 to 3% at close of 2022.
“This, in our opinion, lends more credibility to Repsol’s dividend policy” (25%-30% of its cash flow) – providing an expected return on total shareholder remuneration in 2022-23 of 10-12 % -some three percentage points above the sector average-, he added.
3
