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Investing.com -- Europe’s integrated oil sector entered year-end with refining margins and satellite production shaping earnings across the region.
Jefferies’ latest sector review highlights Galp, Repsol and Eni as the three names where earnings expectations for the fourth quarter are running ahead of Visible Alpha consensus, supported by stronger downstream performance and, in Eni’s case, robust gas and power results.
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Galp
Galp’s fourth-quarter earnings are projected above consensus, driven by midstream strength. The company delivered one of the strongest net income beats in the third quarter, exceeding expectations by 26%, matching OMV for the highest positive surprise in the sector.
Jefferies notes that Galp also ranked among the sector’s leaders on cash flow from operations (CFFO), posting a 32% beat against expectations.
Consensus earnings upgrades following third-quarter results were led by Galp, with FY25 expectations rising about 10%, the largest increase among European peers.
Jefferies’ updated estimates show Galp’s adjusted net income for 2025 unchanged at €1.36 billion, with outlook stability extending through 2027.
The brokerage’s model also places Galp among companies with improving leverage due to lower distributions and divestments.
Galp’s refining performance contributed meaningfully to the sector’s overall strength, with refining margins across the industry rising 26% quarter-over-quarter in Northwest Europe.
Company guidance after results signaled expectations for a softer margin in early 2026. Jefferies maintains a €23 price target for the stock.
Repsol
Repsol also enters the fourth quarter with estimated earnings above consensus, supported mainly by stronger refining margins. Jefferies cites a $9.2/bbl refining indicator for the company, ahead of the Visible Alpha consensus of $8.5/bbl.
The company reported a 24% CFFO beat in the third quarter, one of the highest across the sector. Repsol’s net income surprised to the upside by 6% in the quarter.
Guidance provided after results shows Repsol holding 2025 CFFO expectations at about €6 billion and maintaining a refining margin indicator of $6.9/bbl, raised from $6/bbl.
Production guidance also remains unchanged at roughly 550,000 boe/d for 2025. Jefferies estimates 2025 adjusted income at €3.02 billion, 10% above consensus.
While Repsol is not viewed as a leverage “improver” in the sector, Jefferies projects one of the sharper increases in leverage between 2024 and 2026, the stock remains one of the three names where the firm’s fourth-quarter net income estimates exceed consensus. Jefferies has a €13 price target and a "hold" rating.
Eni
Eni rounds out the group of top European oil names with earnings tracking above consensus into the final quarter.
Jefferies attributes the outperformance primarily to strong gas and power (GGP) results, which supported the company’s upward revisions.
Eni posted a 22% net income beat in the third quarter, one of the highest among the integrated majors.
The brokerage notes Eni as one of the two companies, alongside Galp, that led consensus earnings upgrades following the third quarter, with FY25 expectations rising about 6%. Jefferies has increased its price target to €18 from €16, citing net income upgrades averaging 7% over 2025-27.
Eni also shows one of the highest CFFO sensitivities to changes in oil prices among its European peers, at about 1.4% for each $1 change.
Beyond earnings strength, Eni is identified as a leverage “improver” due to satellite production growth. The company also stands out for consistency: over the trailing four quarters, Eni delivered one of the sector’s highest rates of net income beats.
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