The dividend announced by Repsol In the presentation of its results, it serves the oil company to clear up the doubts that its accounts left on Thursday. The shares suffered losses of 3.5 percent despite the group making more than 1.9 billion through September.
Analysts, however, were uncertain about the performance of the industrial division, according to sources consulted by finanzas.com.
But Repsol announced an increase in remuneration to its shareholders of 5 percent. A session later, the titles bounce 1 percent and the company has received a wave of recommendations from analysts, who are betting on taking positions on the listed company.
Repurchase of 35 million shares
Repsol said that the increase would place the dividend at 0.63 euros per share. To do this, it will carry out a capital reduction equivalent to 75 million shares to correct the remuneration.
The figure is equivalent to 4.9 percent of the share capital, and a 35 million share buyback program will be implemented.
The good moment of the crude one presaged that Repsol would increase the remuneration, but the announced amount has left a trail of purchase recommendations.
“The value will continue to be favored by the rise in the price of oil and gas and its greater diversification,” they explain in Bankinter, one of the firms that maintained its commitment to taking positions in Repsol.
“The dividend is sustainable due to the rise in oil and gas prices and a healthy balance sheet”, detail the analysts, who raised their target price on Repsol to 12.6 euros.
Deutsche Bank and Mirabaud They also indicated the purchase of securities and set target prices of 13.8 and 13.9 euros respectively, which represents a potential of 20 percent compared to Repsol’s current price of 11.2 euros.
“A better scenario allows higher dividends. Repsol will distribute excess cash in two ways: through a higher cash dividend for 2022 and higher capital spending in low-emission businesses, ”explains Álvaro Navarro, from Mirabaud.
The market sees Repsol at 14 euros
The latest reports on Repsol point in a similar direction, and that is that many analysts see Repsol at 14 euros.
Firms such as Kepler and Alantra raised their target price on the oil company’s shares by 0.5 and 0.95 euros respectively until reaching the mentioned threshold.
“The dividend implies an acceleration compared to the 2021-2025 buyback plan. As such, shareholder remuneration in 2021 will amount to € 1.6 billion. By 2022, it leaves room for more share buybacks ”, affirm Fernando Lafuente and Fernando Abril-Martorell, responsible for the Alantra report.
Morgan Stanley and Bernstein analysts also agree. “The company has surprised with an increase in the dividend and the announcement of the exchange of 75 million shares”, details Oswald Clint, from Bernstein.
Bestinver even raised Repsol’s potential to 14.5 euros, while JP Morgan its price shot up to 15.50 euros, which shows a potential revaluation of close to 30 percent. Line in which Goldman Sachs stood.
“We like the cyclical exposure, 65 percent of Repsol’s business benefits from a post-vaccine recovery in travel demand,” argue Goldman Sachs analysts, who did not change their recommendation to hold but increased the target price of Repsol up to 15 euros per title.
Even the less optimistic recommendations consider that Repsol will continue to rise, at least up to 12 euros.
Oddo, RBC Capital and Jefferies opted to keep the titles of the Basque oil company and set a target price of around 12 euros.
The consensus consulted by finanzas.com indicates an average revaluation potential of 13 percent, which would bring the shares up to 12.78 euros per share.
The purchase is also the majority recommendation, with 57 percent of analysts in favor compared to 34 percent who bet on retaining.