-- RBC Capital Markets kept Repsol (REP.MC) at outperform, noting the Spanish oil and gas giant looks well placed to capitalize on the current refining environment.
"Refining margin capture has been a key concern over recent weeks, with investors worried about crude availability, particularly for coastal refiners. Repsol's indicator margin is less relevant in these volatile times, but importantly, [realized] refining margins remain strong, and look set to remain strong through the summer. In 1Q, the refining margin premium ($5.7/bbl) was higher than we had seen in recent years (highest in 1Q23 at $4/bbl), but management have noted a particularly strong start to 2Q26, with realised refining margins well above $20/bbl in April. Repsol's complex refining system is also well set up to take advantage of crude spreads (light-heavy, sweet-sour, etc.), which should support refining margins and be a relative advantage to peers," analysts said Thursday.
According to the research firm, this refining strength and anticipated upstream growth offer "material upside" for Repsol's capital distribution. As such, the research firm now projects 1.5 billion euros in buybacks for the company, noting the figure is more than double the company's current guidance.
On the financial front, RBC updated its estimates, including higher EPS forecasts for full-year 2026 through 2028, following Repsol's first-quarter results. The revised model accounts for a $10 per barrel refining indicator and a $5/bbl realized premium for 2026, alongside other adjustments.
The stock has a price target of 32 euros.