Its news. Another session of decline for the stock TotalEnergies ! This is even the sixth in a row since December 10, so that the price has fallen back to its lowest levels in more than two years.
The environment for oil groups is indeed not very favorable while the International Energy Agency (IEA) estimates that global oil production will increase faster than consumption in 2025, despite the stabilization efforts made by OPEC+ member countries.
The latter have in fact decided to extend production cuts to the tune of 2.2 million barrels per day in an attempt to raise world prices.
According to the IEA, global production is expected to increase by 630,000 barrels per day in 2024, then by 1.9 million barrels per day in 2025, mainly due to the increase in the share of non-member countries. OPEC, like the United States, Brazil or Canada.
For the first time since 1970, the United States produced more than 10 million barrels per day last November, half of which was from shale oil. And this trend could continue with the new Trump administration’s encouragement to produce more (« drill baby drill ! » was one of the Republican candidate’s campaign slogans).
At the same time, demand is growing much more slowly due to the economic slowdown in China, where recovery measures are slow to materialize.
A yield close to 7% for 2025
Our analysis. Since the start of the year, TotalEnergies shares have fallen by almost 16%, but the performance is a little better (-11%) if we take into account the four interim dividends paid for a total of 3.06 euros.
The main question is whether the French oil company can maintain or even improve its distribution policy in a less favorable environment. It seems so to the extent that the group has planned to increase its overall energy production (oil, gas, electricity, bioenergy) by 4% per year until 2030, while reducing the average carbon content by 25%. sales.
Six new projects were launched in the hydrocarbons segment this year (mainly LNG) with a low level of risk (low-cost assets), knowing that the breakeven point for operations is already very competitive (less than $25 per barrel). .
By 2030, the group’s free cash flow should increase by $10 billion and management plans to return 40% to shareholders.
Pour 2025, TotalEnergies will thus buy back its own shares to the tune of 2 billion dollars per quarter and increase the dividend by at least 5%. The dividend of 3.46 euros per share estimated by the Factset consensus, for 2025, shows a yield close to 7% knowing that the valuation (7 times profits) remains much more attractive (almost twice as low) as that of American groups.
Our advice
- Buy [TTE]. Objective : 63 euros
- Profile : dynamic
- Next meeting: February 5, 2025, annual results
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