Repsol (REP SM): Buy: 2Q26 preview – Refining to carry the quarter

Research evidence excerpt

Repsol (REP SM): Buy: 2Q26 preview – Refining to carry the quarter

ing forecasts: Mini-glut now, surplus

later (8 July 2026). Despite the significant deterioration in the outlook for Brent, we 29.00

expect refined product markets to remain tighter than crude through 2H26 and into 20.00

2027 as well. The net effect on our estimates is a 10% uplift in our adjusted net 11.00

income (post-minorities) for 2026 to EUR5.4bn and a 5% increase to our CFFO (pre- 07/25 01/26 07/26

Target price: 26.50 High: 24.79 Low: 12.78 Current: 22.03

WC) for 2026 to EUR7.9bn.

Source: LSEG IBES, HSBC estimates

2Q26 estimates: We raise our 2Q estimate for Repsol’s EBIT by 8% to EUR2.4bn and its

adjusted income (pre-minorities) by 6% to EUR1.9bn, with stronger refining earnings Sadnan Ali*, CFA

(higher margins and enhanced premium capture) offsetting our reduced Upstream Global Oil & Gas Analyst

HSBC Bank plc

estimate due to a materially lower 2Q Brent price (USD97/b actual vs USD114/b sadnan.ali@hsbc.com

estimate). Our CFFO (pre-WC) increases by 7% to EUR2.0bn, though a working capital +44 207 9910569

build will likely weigh on cash flow in the quarter. We anticipate net debt and gearing will Kim Fustier*

Senior Global Oil & Gas Analyst

decrease to EUR3.6bn and 11%, respectively, supported by the asset rotation in Spain to HSBC Bank plc

Masdar, which results in a deconsolidation of cEUR550m of net debt. kim.fustier@hsbc.com

+44 20 3359 2136

Maintain Buy rating; raise TP to EUR26.50 (from EUR25.50): We upgraded Repsol in Ujjwal Sharma*

May as we saw strong upside potential across refining, upstream production, CFFO Associate

Bangalore

growth, and share buybacks – see Repsol: Upgrade to Buy: Poised to capture the high-

margin environment (18 May 2026).