LNG And Renewables Will Drive Global Energy Transition

Amid robust operational results and positive medium-term refining margins tempered by lower sequential trading contributions and sector-wide adjustments, the consensus analyst price target for TotalEnergies was modestly reduced from €63.53 to €62.66.

Analyst Commentary

• Recent results underscore TotalEnergies' operational strength among international oil companies, with a balanced combination of growth prospects, resource depth, and a focus on sustainable shareholder returns.
• Bullish analysts cite a positive medium-term outlook for refining margins, lending further support to upward price target revisions.
• Updates to company guidance and modest adjustments to operating assumptions led some analysts to reduce targets, particularly due to anticipated lower sequential trading contributions linked to ongoing market volatility.
• While marketing results have shown improvement, refining performance indicators suggest less upside than previously expected, tempering some near-term enthusiasm.
• General sector-wide adjustments to price targets reflect evolving expectations for the broader integrated oil, refining, and E&P landscape.

What's in the News

• TotalEnergies commenced construction of the Common Seawater Supply Project and full field development of the Ratawi oil field in Iraq, marking the execution of all phases of its multi-energy Gas Growth Integrated Project (GGIP), which targets sustainable resource development, gas processing, and reduced emissions (Key Developments).
• The company signed a 10-year agreement with KOGAS to supply South Korea with up to 3 Mt/year of LNG from 2028, further consolidating TotalEnergies’ position as a global LNG leader with supply primarily sourced from U.S. assets (Key Developments).
• TotalEnergies is progressing with strategic asset divestment, receiving at least two bids for its shale oil assets in Argentina’s Vaca Muerta formation, with indications of an imminent sale valued between $400 million and $500 million, aligning with its reallocation strategy (Bloomberg/Periodicals, Key Developments).
• The company continues to expand its renewable and low-carbon activities, including acquiring a 50% stake in AES Dominicana Renewables’ 1.5 GW solar, wind, and BESS portfolio across the Caribbean, and participating in pioneer CO₂ transportation and storage projects in Norway (Key Developments).
• An OPEC+ decision to raise oil output in October—partially reversing earlier production cuts—could impact global oil prices and supply-demand dynamics, affecting major publicly traded companies in the sector including TotalEnergies (WSJ/Periodicals).

Valuation Changes

Summary of Valuation Changes for TotalEnergies

• The Consensus Analyst Price Target remained effectively unchanged, moving only marginally from €63.53 to €62.66.
• The Consensus Revenue Growth forecasts for TotalEnergies has significantly risen from 1.4% per annum to 2.2% per annum.
• The Future P/E for TotalEnergies has significantly fallen from 11.24x to 9.49x.