Back to the Defence Playbook; Moving Galp to Overweight

Research evidence excerpt

Back to the Defence Playbook; Moving Galp to Overweight

Idea

July 2, 2026 10:54 PM GMT

Morgan Stanley & Co. International plc+MEnergy Mid-Majors | Europe Guilherme Levy

Equity Analyst

Back to the Defence Playbook; Guilherme.Levy@morganstanley.comMartijn Rats, CFA +44 20 7425-6616

Equity Analyst and Commodities Strategist

Martijn.Rats@morganstanley.com +44 20 7425-6618

Moving Galp to Overweight Alice Bergier Winograd

Alice.Winograd@morganstanley.com +44 20 7425-0174

Under softer oil prices, we revert back to defence plays. Galp

Energy

screens better, and coupled with a busy period of catalysts and Europe

attractive valuation, we move the stock to OW. Relative to Galp, Industry View In-Line

we downgrade Repsol to EW. Also, we prefer to wait for a What’s Changed

better entry point for OMV. GalpRatingEnergia (GALP.LS) FromEqual-weight ToOverweight

Price Target €24.00 €22.00

Key Takeaways Repsol (REP.MC) From To

We incorporate lower commodity prices into our models and cut earnings for Rating Overweight Equal-weight

Price Target €28.00 €24.00

2026-27 by 5-10%. We also cut price targets for Galp and Repsol by ~10%.

OMV AG (OMVV.VI) From To

Upgrade Galp to Overweight: high quality, defensive, catalysts (Moeve, Venus FID,

Rating NA Equal-weight

Rovuma FID), long-term restructuring question marks. Price Target NA €56.00

Repsol to EW relative to Galp: strong refining, but how quickly will buybacks be

raised, and does the Venezuela opportunity postpone the E&P liquidity event?

Resume coverage of OMV at EW: mid-term chemicals expectations look low

enough (but when will the cycle revert?), M&A risk in Upstream, prefer to wait

for now.

Exhibit 1: We think Galp's defensive characteristics could once again come into