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On Thursday, Barclays (LON:BARC) analyst Lydia Rainforth upgraded Repsol SA (REP:SM) (OTC:REPYY) stock rating from Equal Weight to Overweight and set a new price target of €15.00. The upgrade reflects Barclays’ positive outlook on the resilience of oil demand and refining margins.
Rainforth highlighted that during Repsol’s recent conference call, CEO Josu Jon Imaz provided clarity on the company’s capital framework under stressed conditions, addressing some market concerns. This reassurance, combined with the company’s positioning and momentum, contributed to the upgrade.
Repsol’s near-term prospects appear promising, with better-than-expected refining margins potentially driving stock momentum. Management’s expressed confidence in their €2 billion disposal plans is also seen as a protective measure for shareholder returns.
Looking at the medium-term, Barclays anticipates strong upstream growth for Repsol. The company’s pipeline, which includes the Alaska Pikka project expected to come online in 2026, the Leon/Castile project in 2025, and the continued ramp-up at the Marcellus and Eagle Ford fields in the U.S., is set to bolster production and cash flow.
Barclays also noted Repsol’s strategic direction, emphasizing a larger and greener approach. The firm’s assessment suggests that Repsol’s strategic positioning is among the strongest it has been in some time, with the company leveraging its strengths effectively.
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