Street Calls of the Week
Investing.com - RBC Capital has lowered its price target on TotalEnergies SE (EPA:TTE) (NYSE:TTE) to €70.00 from €75.00 while maintaining an Outperform rating on the stock. The $133.8 billion energy giant, which boasts a solid financial health score according to InvestingPro data, currently trades at an attractive 11.2x earnings multiple.
The adjustment follows TotalEnergies’ recent Capital Markets Day (CMD), which according to RBC Capital analyst Biraj Borkhataria featured a cautious tone from the management team.
The energy company is reportedly preparing its business for a weaker macroeconomic environment while attempting to preserve its broader strategic direction.
RBC Capital noted that TotalEnergies’ capital expenditure cuts primarily focus on the power segment, an area where consensus estimates "did not appear to fully reflect the prior growth targets anyway."
Despite the reduced price target, RBC Capital maintained its long-term positive stance on TotalEnergies, stating that "time will tell whether the cautious stance is warranted."
In other recent news, TotalEnergies has agreed to sell a 50% stake in its North American solar portfolio to KKR for an enterprise value of $1.25 billion. This transaction involves six utility-scale solar assets and 41 distributed generation assets, primarily located in the United States, with TotalEnergies expected to receive approximately $950 million at closing. Additionally, TotalEnergies has announced a $7.5 billion savings program over 2026-2030, alongside a reduction in its capital expenditure guidance to approximately $16 billion in 2026 and $15-17 billion annually during 2027-2030. The company plans to focus on high-margin upstream projects while maintaining selective investments in low-carbon initiatives. In another development, TotalEnergies has signed an agreement to acquire a 49% interest in natural gas assets owned by Continental Resources in Oklahoma’s Anadarko Basin. Meanwhile, Berenberg has downgraded TotalEnergies from Buy to Hold, citing concerns over higher capital expenditure requirements that could impact shareholder returns. The price target was also reduced from EUR60.00 to EUR57.00 and from $67.00 to $64.00.
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