Berenberg lowered its first-quarter forecasts for Galp Energia (GALP.LS) after its trading update for the three-month period showed the impact of volatility on the group's "strong" operations.
"Galp reported its Q1 2026 trading statement on 13 April, highlighting strong upstream production from its assets in Brazil and good performance in the refining business," analysts said Wednesday. "This was offset by non-cash items in the Midstream business and a working capital build, which affect our EBITDA and [cash flow from operations] forecasts respectively. However, we believe these temporary effects should reverse over time as the commodity price environment normalises and view underlying performance in the period as positive."
As such, the research firm's estimate for the Portuguese energy company's replacement cost adjusted EBITDA in first-quarter 2026 was reduced by 3%, while the CFFO estimate before and after working capital was raised by 14% and cut by 10%, respectively. The company also revised its adjusted EPS and cash flow per share projections for 2026 to 2028.
Moving ahead, analysts now expect focus on Galp's ramp-up operations in Brazil's Bacalhau field, refining margins and the potential benefit from higher US-Europe gas price spreads in its liquefied natural gas business.
The stock's hold rating and price target of 20 euros were unchanged, as Berenberg noted Galp's current valuation and "limited" catalysts in the near term.