Sunday, January 16

Repsol rearms the attack. Buy now to earn 30%

The rebound in oil after the fear of the omicron variant calmed down made it possible for Repsol to attack the psychological level of 10 euros per share.

The group that leads Joshua Jon Imaz has been involved in this battle for more than a month, but analysts consulted by they are optimistic for the final stretch of the year.

The expert consensus of calculates a target price for Repsol of 12.88 euros, which shows a potential upside of almost 30 percent.

In addition, the price has stabilized after the latest falls and the company is one step away from recovering important technical levels that could further boost the group’s price.

Equally, Repsol continued to make shareholder remuneration a fortress and projects a dividend yield of 6.5 percent for the next twelve months, which places the group at the level of Banco Santander, Telefónica and Caixabank.

As long as crude oil continues to rise and is trading above $ 50 and debt remains under control, Repsol’s dividend is sustainable, as stated in the oil company’s strategic plan.

The sector and Repsol, pending the crude

Although the concern about the omicron variant forced the last falls, Brent oil made a bottom in the area of ​​70 dollars and is about to recover the average of 200 sessions, an important long-term support.

Repsol’s comeback and the sustainability of dividends in the oil sector depend on this.

“We remain optimistic about the oil price outlook through 2022 as we believe demand will continue to improve next year as inventories and strategic reserves decline,” analysts at Bloomberg Intelligence said.

In fact, the omicron variant and the release of strategic reserves may push the OPEC + to consider making a pause in increasing its monthly production in January, added the same sources.

Although crude oil is still far from the levels reached before the pandemic, it is also true that the market has shaken the fear of omicron, as it progressed

Rebound options for Repsol

From a technical point of view, after the last falls, the price of Repsol found important support at 9.6 euros, said the magazine’s chief analyst INVESTMENT Y, Josep Codina.

Now, “I would need to regain the 200 session average in order to have a bullish return pattern.”

This level is currently at 10.3 euros, at a distance of just 3 percent, which is a very affordable target for Repsol if the oil recovery continues.

Exceeding the average of 200 sessions would leave Repsol with a formation of “a minor double-bottom structure, and if confirmed it could have ended the correction that started from the December highs,” he added. Codina.

Higher, Repsol would meet intermediate resistance at 10.5 euros, he pointed out Jose Luis Herrera, Analyst at Global Investment Bank (BIG). But the next goal would already be 11.5-11.7 euros.

The upward path seems clear and Repsol has the wickers to rearm the rebound. At the bottom, the danger zone that the price should not lose is 9.6 euros.

Repsol prepares to leave the Russian market

Furthermore, the news flow in recent sessions did not bring any surprises that could compromise Repsol’s rebound.

On Monday it became known that the oil company is preparing to leave the Russian market before the end of the year, within the line it established in its Strategic Plan 2021-2025 to focus activity on the most competitive areas and abandon the most polluting activities.

To do this, it will sell at a symbolic price its participation in Evrotek Yugra y ASB Geo. These are investments that could reach 260 million euros, although it is unlikely that the oil company will recover any of this money.

The group’s decision to move towards carbon neutrality by 2050 is firm, although precisely this policy is one of the points that generate doubts among investors.

The main doubt comes from the debate of those who “speak about the goodness or not of investing in alternative energies, or on the contrary, dedicating those investments to pay more cash to shareholders,” he said. Victor Peiro, director of analysis of GVC Gaesco Valores.

But it is giving Repsol to attend to both fronts.

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