Is TotalEnergies (ENXTPA:TTE) Undervalued? A Fresh Look at Its Latest Valuation

TotalEnergies (ENXTPA:TTE) might not be making front-page headlines today, but its recent price movements could have left investors pausing and wondering what’s next. There hasn't been a distinct event to push the stock up or down this week. Sometimes, silence says just as much as a big announcement. When a stock stays relatively quiet against a shifting market backdrop, it can be a good prompt to revisit its valuation and fundamentals.

Looking at the bigger picture, TotalEnergies' share price has drifted down 12% over the past year, erasing some of the prior gains that investors enjoyed over the past three and five years. Long-term momentum has rewarded patient holders; however, the past month has seen another 4% slide, and performance this year-to-date remains in the red. The company has also reported some steady revenue and profit growth despite the softer share price.

So does this recent lull present a buying opportunity, or is the market already factoring in any future growth on the horizon?

Most Popular Narrative: 16.4% Undervalued

According to the most widely followed narrative, TotalEnergies is currently considered undervalued by the market, with fair value estimates significantly above its prevailing share price.

The company's ongoing expansion in gas and power, including LNG projects in the U.S., Canada, Qatar, and Malaysia as well as its strong position in signing flexible, long-term LNG contracts, positions TotalEnergies to benefit from the global shift toward cleaner energy and the sustained robust demand for natural gas. This is expected to support future top-line revenue growth and margin stability.

Want to know what’s truly fueling this deep discount? This narrative rests on a handful of pivotal assumptions about TotalEnergies’ profit run-rate and how rapidly it’s expected to turn growth investments into sustainable margins. The real story lies in the figures, especially forecasts that diverge sharply from the sector and could rewrite how investors value this multi-energy giant in the next three years.

Result: Fair Value of €62.66 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, further oil oversupply or weak downstream margins could derail TotalEnergies’ outlook. These factors would challenge growth assumptions and dampen enthusiasm for near-term upside.

Find out about the key risks to this TotalEnergies narrative.

Another View: What Does the DCF Model Say?

Taking a step back from market multiples, our SWS DCF model also sees clear signs of undervaluation for TotalEnergies. This alternative approach relies on future cash flow projections. But does it capture the whole picture, or does it miss key risks?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out TotalEnergies for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own TotalEnergies Narrative

If you think the analysis so far misses something, or you want to dig into the numbers yourself, you can easily create your own view in just minutes. Do it your way

A great starting point for your TotalEnergies research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.

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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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