From Financial Modeling Prep: 2025-04-07 03:35:00

Bank of America highlights Shell, Equinor, and TotalEnergies as top picks among European oil majors due to a decoupling between share prices and earnings momentum. Despite Brent crude falling 6% year-to-date, stock prices have risen around 10%, emphasizing the premium investors place on resilience and strong balance sheets.

Goldman Sachs notes that European oil majors are undervalued, with Shell’s breakeven oil price at $65 per barrel, well below the sector average of $90+. BofA highlights that Shell, TotalEnergies, and Equinor offer high free cash flow yields around 5%, attractive in a sector with weak cash flow generation.

Equinor shows upside potential for 1Q25 and full-year earnings, driven by a $13/mbtu TTF gas price assumption. Rising U.S. tariffs may impact global trade and European energy companies, but strong balance sheets and low breakeven prices make these stocks appealing in the long term.

Investors are shifting focus to resilience and free cash flow as key indicators of performance, favoring companies like Shell, Equinor, and TotalEnergies over short-term earnings growth. Despite Brent crude price drops, stock prices have risen, indicating potential mispricing and undervaluation in the market.

European oil majors present an opportunity for investors as the market rebalances priorities. With low breakeven prices and attractive free cash flow yields, companies like Shell, Equinor, and TotalEnergies offer value. BofA sees potential for a re-rating in European energy equities once underlying strengths are recognized.

Investors can track developments in the European oil sector through resources like the Financial Growth API for earnings analysis and the Commodities API for real-time oil price movements. BofA’s focus on Shell, Equinor, and TotalEnergies highlights the investment potential in undervalued European oil majors with strong financials and free cash flow generation capabilities.



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