Repsol: What duration of supernormal is priced in?

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Repsol: What duration of supernormal is priced in?

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Repsol

What duration of supernormal is priced in?

Reiterate Rating: UNDERPERFORM | PO: 23.00 EUR | Price: 26.41 EUR

Key takeaways 24 July 2026

Equity• Repsol's 2Q26 earnings beat our and consensus expectations thanks to supernormal

Downstream conditions

• We raise FY26 estimates, but stop short of extrapolating July strength into all of 3Q26 Key Changes

or 2H26 (EUR) Previous Current

• Reiterate Underperform. Our increased PO of EUR23 still carries >10% downside to Price Obj. 20.00 23.00

the share price 2026E EPS 3.78 4.54

2027E EPS 3.82 3.91

2Q26 beat to herald more for 2H26? 2028E EPS 3.88 3.99

We note Repsol's achieved refining margins made fresh >$30/bbl records in July vs. Christopher Kuplent >>

averaging <$25/bbl across 2Q26. We raise our estimates – albeit without extrapolating Research Analyst

current records into 2H26 (but still >$20/bbl): And yet, we now see FY26E CFFO at MLI+44 (UK)20 7995 8222

EUR8.5bn (vs. Repsol’s >EUR5.5-6.0bn guidance). While we also increase our FY26 christopher.kuplent@bofa.com

buyback estimate to EUR1.2bn, we nevertheless struggle to keep up with Repsol’s Matthew Smith >>

market cap having added >EUR8bn since February – suggesting a re-rating worth >3x ResearchMLI (UK) Analyst

this year’s cash flow uplift. We increase our SOTP-derived PO to EUR23 to reflect our +44 20 7996 7109 matt.smith1@bofa.com

estimate changes following 2Q results. However, we believe duration risks surrounding

Cian Evans-Cowie >>

supernormal-for-longer margins represent more attractive risk/reward equations Research Analyst

elsewhere – we reiterate our Underperform as we still see >10% share price downside MLI (UK) +44 20 7995 0940

to our PO. cian.evans-cowie@bofa.com