Uncertainty lingers over TotalEnergies' future status
TotalEnergies, the French energy producer, is currently considered undervalued by multiple reputable analysts, including JPMorgan, UBS, and Berenberg. These experts have reiterated their bullish outlook on the company, providing price targets that generally range from the mid-to-high €60s.
JPMorgan's analyst, Matthew Lofting, has reaffirmed his "Overweight" rating for TotalEnergies, with a price target of around €60 per share. UBS experts have maintained a buy rating with a price target close to €65-€68, while Berenberg similarly sees TotalEnergies as undervalued, with a price target in the range of €63-€68. The consensus price target for TotalEnergies is about €63.26.
Despite a recent 24% miss in EPS estimates, analysts believe these earnings misses will not significantly lower the stock price in the near term. The stock’s low price-to-earnings ratio (~11.19) also supports views of undervaluation relative to its market cap and fundamentals.
Henri Patricot of UBS expects a less volatile development in oil prices in the third quarter compared to the previous quarter. TotalEnergies has developed relatively stably in a persistently challenging market environment.
It's worth noting that the current yield of TotalEnergies' dividend is six percent. However, Berenberg's analyst Henry Tarr has reduced the price target for TotalEnergies' dividend stocks from 61.00 to 60.00 euros, citing concerns about the high payout ratio of 55 percent and the increase in net debt.
Despite these concerns, most experts who focus on the shares of the French energy producer agree that the price is still significantly undervalued. The TotalEnergies stock has been trading sideways for several months, and the stop-loss for the stock can still be maintained at 41.00 euros.
However, it's important to note that the publisher Börsenmedien AG's CEO and majority shareholder, Mr. Bernd Förtsch, has direct and indirect positions in the financial instruments mentioned in the publication or related derivatives, which could benefit from the price development resulting from the publication (conflict of interest note).
Lofting of JPMorgan has also predicted a potential diesel market shortage that could persist into next year, which could potentially impact TotalEnergies' performance.
Following the quarterly results, UBS experts rated TotalEnergies' shares as "Buy". DER AKTIONÄR, on the other hand, does not mention any change in the "Overweight" rating or the price target set by JPMorgan's Lofting.
In conclusion, despite some concerns about the high payout ratio and net debt, multiple analysts continue to view TotalEnergies as undervalued, with price targets generally in the mid-to-high €60s range. Investors may want to consider the potential impact of the predicted diesel market shortage and the overall market conditions before making investment decisions.
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