EU Oil & Gas Model update post 2Q TS -TotalEnergies, BP, Galp

Research evidence excerpt

EU Oil & Gas Model update post 2Q TS -TotalEnergies, BP, Galp

Matthew Lofting, CFA AC Europe Equity Research

(44-20) 7134-6301 16 July 2026 J P M O R G A N

matthew.lofting@jpmorgan.com

Investment Thesis, Valuation and Risks

TotalEnergies (Overweight; Price Target: €83.00)

Investment Thesis

We are OW TotalEnergies for: 1) Competitive oil leverage coupled with leading O&G

longevity underlined by a 12 year proven reserve life; 2) Strong balance sheet positions

it well to translate higher price scenarios into higher distributions.

Valuation

Our Jun-27 PT is €83, set as an equal-weighted blend of SOTP and 2027E PER. We assume

value crystallisation on our Renewables valuation (i.e. 0% discount) and incorporate the

risk-adjusted Russia value upside into the NAV( $6bn or €3/sh). We apply a 15% discount

to the O&G business offset by a 5% premium on its resource longevity. On multiples, we

target a 15% sector discount to an EU mkt 2027E forward median PER 14.0x; from this, we

adjust for Total’s historical premium/discount to the sector, which gives a target 11.5x on

2027E EPS at $75/bbl Brent.

Risks to Rating and Price Target

Macro risks – The main generic risks, both to the upside and downside, come from crude

oil, natural gas or refining margins significantly differing from our assumptions.

Balance sheet – While gearing remains comfortable in an absolute sense, leverage

increases during 2025 leave delivery on underlying deleveraging as a key driver to future

share price performance. Slippage would likely weigh on the shares.

E&P project execution risk – delivery on core growth projects is central to delivering on

TotalEnergies differentiation through sustained topline growth.