JPMorgan Chase: El sector petrolero europeo se beneficiará en un entorno de $100 por barril de petróleo, estos son sus valores preferidos

Investing.com - Morgan Stanley believes that in an environment where oil prices remain at $100 per barrel, European oil and natural gas stocks are in a favorable position, with gains from rising oil prices outweighing losses caused by disruptions related to Middle Eastern supply risks.

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Analyst Matthew Lofting stated, “The net financial impact is clearly positive,” estimating that production losses from the Strait of Hormuz disruption amount to about $6 per barrel in operating cash flow, with a maximum of $10 per barrel for the most exposed companies. In comparison, oil prices have risen about $30 since the conflict began.

Regarding valuation, Lofting pointed out that in a scenario with oil at $100, free cash flow (FCF) yields could increase from around 10% at forward prices to about 14%, which is still “slightly cheap” compared to levels during the 2022 energy crisis.

When commenting on stock prices, the analyst said, “The water rises with the tide,” noting that since the conflict started, the sector’s stock prices have increased by over 10%.

In this environment, Morgan Stanley’s preferred stocks are Shell, TotalEnergies, Eni, and Galp, due to their strong price leverage, long-term production outlook, and improving valuations amid rising commodity prices.

Eni and Shell are also under focus for their higher sensitivity to oil prices, while Galp’s leverage has been underestimated by recent financial data.

Lofting expects trading conditions to provide additional support, noting that an extended conflict could create “good trading volatility” and boost earnings, partially offsetting production losses. Morgan Stanley’s model shows a one standard deviation improvement in trading performance, with Shell’s upside potential around $4 billion.

Meanwhile, some risks remain. Lofting pointed out the possibility of re-imposing windfall taxes, predicting an additional 5% tax on cash flows based on the 2022-23 precedent.

He also highlighted differences in risk exposure among Middle Eastern assets, with TotalEnergies, Shell, and OMV being the most exposed, while Equinor, Repsol, and Galp have almost no direct exposure. The analyst said that the latter group “may show higher-than-usual sensitivity to recent oil and natural gas prices.”

He added that, looking into the first quarter, colder winter and recent market dislocations are expected to support stronger trading performance.

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