«We anticipate a negative share price reaction to Repsol’s earnings report. We lower our estimate of adjusted operating profit for the fourth quarter by 12%, to approximately $1.1 billionreflecting lower than expected performance in Upstream. In Downstream, although the refining margin remained stable at 11.1 dollars per barrel, which is in line with our expectations,” they indicate.
Los Final results of the Spanish oil company from last year will be known on February 29. In Upstream they reduce their EBIT forecast to 402 million euros from 555 million euros, a drop of 28%, reflecting lower than expected production levels, an unfavorable volume mix and the impact of the exchange rate. In the industrial business, they slightly cut the EBIT estimate by 5%, to 542 million euros, mainly due to lower refinery utilization than expected. Yes ok The Spanish refining margin indicator for the fourth quarter remained stable at 11.1 dollars a barrelwhich coincides with Barclays forecast.
Regarding direct business with the client, they maintain their EBIT estimate at 229 million. And they conclude in their note: “Overall, after the update, we reduced our fourth quarter group adjusted EBIT by 12%, to approximately €1.1 billion, and reduced the adjusted net result before minorities by 19%, to €659 million.” Some more unfavorable forecasts but which contrast with the recommendation to overweight Repsol with a target price of 20 euros per share.