Berenberg raised its price target for Repsol (REP.MC), saying it anticipates second-half refining margins to "remain healthy" amid supply bottlenecks from the Middle East conflict and reduced Russian refinery availability.
"Repsol's share price has doubled over the past 12 months, supported mainly by strong refining margins, driven in particular by materially higher diesel prices," analysts said Monday. "We mark to market our refining margin and commodity price assumptions, driving our near-term [cash flow from operations] estimates materially higher and supporting an above-consensus buyback assumption - the buyback for the remainder of the year will be confirmed in October. We believe the shares have further to run and increase our Repsol price target to EUR37.50 (from EUR31) and retain our Buy rating."
While modeling for the bottom of the Spanish energy company's 30% to 40% CFFO payout target, the research firm raised its full-year 2026 share repurchase forecast to 1.8 billion euros from 1.25 billion euros, implying that an additional 950 million-euro share buyback will be announced in October and an overall 2026 shareholder return yield of 10%. In 2027, Berenberg expects a further 1 billion euros in buybacks with an 8% yield.