Macro to the Rescue, Production to Disappoint

Research evidence excerpt

Macro to the Rescue, Production to Disappoint

Idea

July 16, 2026 09:54 AM GMT

Morgan Stanley C.T.V.M. S.A.+MEcopetrol | Latin America Bruno Montanari

Equity Analyst

Macro to the Rescue, Bruno.Montanari@morganstanley.comThiago S Casqueiro +55 11 3048-6225

Research Associate

Thiago.Casqueiro@morganstanley.com +55 11 3048-9507

Production to Disappoint Luiza B Belem

Luiza.Belem@morganstanley.com +55 11 3048-4276

EC is up 60% YTD, fueled by enthusiasm over the forthcoming

government change and a constructive oil backdrop. Still, the Ecopetrol SA (EC.N, EC UN)

quarterly outlook reinforces our concerns over the structural LatAm Integrated Oil & Gas | Colombia

Stock Rating Underweight

challenges facing Colombia’s upstream industry, particularly its Industry View No Rating

Price target US$12.00

mature and declining production base. Remain UW. Shr price, close (Jul 15, 2026) US$15.98

Mkt cap, curr (mm) US$32,852

What's new: Ecopetrol released its operating and financial update for 2Q26, which 52-Week Range US$17.74-8.27

supports our concerns about the structural challenges facing the Colombian Fiscal Year Ending 12/25 12/26e 12/27e 12/28e

upstream industry. We take the opportunity to incorporate the data into our model. EPS (US$)** 1.08 2.03 1.85 1.56

Prior EPS (US$)** - 1.97 1.86 1.59

EPS (US$)§ 1.25 1.97 1.92 1.75

Structural concerns continue to play out… Our long-standing thesis has been that

P/E 8.6 7.1 7.4 8.4

Ecopetrol's investment case is increasingly constrained by the structural challenges P/BV 0.9 1.1 1.2 1.1

EV/EBITDA 4.7 4.2 4.7 4.7

of Colombia's upstream industry. The company operates in a mature basin ROE (%) 10.8 17.8 15.4 13.8

characterized by high decline rates, limited large-scale discoveries and rising Div yld (%) 15.1 4.5 8.5 8.9