TotalEnergies Downgraded to Reduce Amid LNG Oversupply Concerns
Written by Emily J. Thompson, Senior Investment Analyst
Source: seekingalpha
- Rating Downgrade: Kepler Cheuvreux downgraded TotalEnergies from Hold to Reduce and removed it from its Most Preferred list, citing rising vulnerability to a prolonged liquefied natural gas (LNG) oversupply cycle.
- LNG Supply Risk: TotalEnergies is expected to hold a net long LNG position of approximately 14 million metric tons per year by 2026, expanding to 23 million tons per year by 2030, which analysts believe exposes the company to potential LNG oversupply risks, especially if prices slide to $5 per MMBtu.
- BP as Alternative: Kepler replaced TotalEnergies with BP among its preferred European names, highlighting BP's resilience in a downturn, with its theoretical long LNG position expected to decline to zero by 2027, thereby reducing exposure to falling spot prices.
- Cash Flow Support: BP benefits from long-term LNG offtake contracts with particularly low oil-linked pricing slopes, which analysts noted would support cash flow resilience in weaker gas markets.
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Analyst Views on BP
Wall Street analysts forecast BP stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for BP is 84.26 USD with a low forecast of 6.38 USD and a high forecast of 503.69 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
11 Analyst Rating
5 Buy
5 Hold
1 Sell
Moderate Buy
Current: 37.700
Low
6.38
Averages
84.26
High
503.69
Current: 37.700
Low
6.38
Averages
84.26
High
503.69
About BP
BP p.l.c. is a United Kingdom-based integrated energy company. The Company's segments include Gas & low carbon energy, Oil production & operations, Customers & products, and Other businesses & corporate. Its gas business includes regions with upstream activities that produce natural gas, integrated gas and power, and gas trading. Its low carbon business includes solar, offshore and onshore wind, hydrogen and carbon capture and storage and power trading. Oil production & operations segment comprises regions with upstream activities that predominantly produce crude oil, including bpx energy. Customers & products segment comprises its customer-focused businesses, which include convenience and retail fuels, electric vehicle charging, as well as Castrol, aviation and business to business and midstream. It also includes its products businesses, refining and oil trading, as well as its bioenergy businesses. Other businesses & corporate segment comprises technology and bp ventures.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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