Galp Energia Kept at Buy as BofA Notes Brazil Production, Namibia Potential
BofA Global Research affirmed its investment case for Galp Energia (GALP.LS), noting the Portuguese energy company's production growth "begins to bear fruit" in Brazil alongside long-term potential seen in Namibia."Galp's 1Q26 results showcased its first signs of growth, beating on EBITDA by 6%. We expect Bacalhau's continued ramp-up in Brazil to drive FY26e production up 17% Y/Y and c.30% by FY27e (vs FY25). We see discoveries in Namibia as Galp's key point of difference; we estimate these underscore a company reserve life of c.20yrs, which betters most European Integrated Oils. Namibia could represent towards ~100 [thousand barrels per day] net production to Galp by the early 2030s versus Within this context, the research firm trimmed its 2026 and 2028 EPS projections, alongside a 1% cut to its 2026 EBITDA estimate amid lower profitability in industrials and midstream. On the other hand, analysts raised their production forecast by 2% to 130kb/d, aligning with the top range of management's target of 125kb/d to 130kb/d.BofA also continues to expect a 10% free cash flow yield for the year at $93 per barrel Brent price, which analysts believe Galp can sustain through 2028, even at the $75/bbl Brent forecast.