Is It Too Late To Consider TotalEnergies After Strong 2025 Share Price Gains?

• If you are wondering whether TotalEnergies still offers good value after such a strong run, or if you might be late to the party, this breakdown can help you assess whether the current price still makes sense.
• The stock has climbed 6.7% over the last month and 12.4% over the past year, while long-term holders have seen a 105.6% gain over five years, suggesting the market has been steadily re-rating the shares.
• Recent headlines have highlighted TotalEnergies expanding its LNG footprint and increasing its focus on large-scale renewable projects, moves that can influence how investors think about the company’s long-term cash flows and risk profile. At the same time, ongoing discussions around new oil and gas developments and buyback programs have kept the stock in the spotlight for both income-focused and growth-focused investors.
• Despite this, TotalEnergies scores a solid 5/6 valuation check, which means it appears undervalued on most of the key metrics tracked in that framework. Next, we will walk through those methods, then finish with a more nuanced way to think about fair value than any single model on its own.

TotalEnergies delivered 12.4% returns over the last year. See how this stacks up to the rest of the Oil and Gas industry.

Approach 1: TotalEnergies Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model estimates what a business is worth today by projecting its future cash flows and discounting them back to a present value. For TotalEnergies, this approach uses a 2 stage Free Cash Flow to Equity framework based on cash flow projections.

The company generated last twelve months free cash flow of about $14.2 billion, and analysts expect this to remain robust, with modeled cash flows still above $14 billion a year by 2027. Beyond the explicit analyst horizon, Simply Wall St extrapolates cash flows out over the next decade, which gradually rise but at a modest pace, reflecting a mature, cash generative energy business rather than a high growth story.

Bringing all those projected cash flows back to today, the model arrives at an estimated intrinsic value of €128.79 per share. Compared with the current market price, this implies a 55.6% discount, suggesting the shares trade well below what the cash flows alone would justify.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests TotalEnergies is undervalued by 55.6%. Track this in your watchlist or portfolio, or discover 912 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for TotalEnergies.

Approach 2: TotalEnergies Price vs Earnings

For a profitable, established business like TotalEnergies, the price to earnings (PE) ratio is a practical way to judge whether investors are paying a sensible price for each euro of current profits. In broad terms, companies with stronger growth prospects and lower perceived risk usually trade on a higher PE, while slower growing or riskier businesses tend to trade on lower multiples.

TotalEnergies currently trades on a PE of about 10.15x, which is below both the Oil and Gas industry average of roughly 13.67x and the broader peer group average of around 24.13x. Simply Wall St also calculates a Fair Ratio of 17.33x, its view of what a reasonable PE for TotalEnergies could be once factors like earnings growth, profitability, industry, market cap and specific risks are taken into account.

Compared with simple peer or sector comparisons, this Fair Ratio provides a more tailored benchmark because it explicitly adjusts for the company’s own fundamentals rather than assuming all Oil and Gas majors deserve the same rating. With the shares trading at 10.15x versus a Fair Ratio of 17.33x, the multiple suggests the market may be undervaluing TotalEnergies relative to its earnings profile.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your TotalEnergies Narrative

Earlier we mentioned that there is an even better way to understand valuation. On Simply Wall St’s Community page you can use Narratives, where you or other investors attach a clear story about TotalEnergies, including assumptions for future revenue, earnings and margins, to a financial forecast that calculates fair value and compares it with today’s price. This can signal when it might be attractive to buy or sell and then automatically updates that view as new news or earnings arrive.

For example, one Narrative might focus on LNG expansion, renewables growth, digital efficiency and disciplined divestments to justify a higher fair value near the most bullish analyst target of about €77.57. A more cautious Narrative could lean into risks like weak oil prices, downstream overcapacity, transition risks and geopolitical risks to support a lower fair value closer to the most bearish target of around €52.82. All of this sits within a simple, accessible framework that lets millions of investors quickly see how a company’s story links to the numbers and decide which perspective they agree with.

Do you think there's more to the story for TotalEnergies? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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