On Thursday, RBC Capital Markets adjusted its stance on TotalEnergies (EPA:TTEF) SE (TTE:FP) (NYSE: TTE), upgrading the company's stock from Sector Perform to Outperform. The firm also set a new price target for TotalEnergies at €80.00. This revision reflects a more positive outlook on the energy company's prospects.
The upgrade comes after TotalEnergies experienced notable underperformance in comparison to its sector. This was attributed to uncertainties in French politics and specific issues related to the company's recent investments. However, RBC Capital noted that gas prices have been on the rise, a factor that benefits TotalEnergies due to its exposure to the gas market.
RBC Capital highlighted TotalEnergies' promising growth narrative, projecting it to unfold over the next few years. The firm emphasized the energy company's integrated power strategy, which it regards as the most credible among its peers in the integrated energy sector.
The firm also pointed out that TotalEnergies currently trades at a modest valuation premium compared to its peers. Moreover, it is expected to lead in total shareholder return by 2025. Based on these factors, RBC Capital sees a more constructive risk-reward balance for TotalEnergies shareholders and has thus raised the stock to an Outperform rating.
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