Equinor ASA: 2Q EPS in line, gearing better; next macro steps the key driver

Research evidence excerpt

Equinor ASA: 2Q EPS in line, gearing better; next macro steps the key driver

Matthew Lofting, CFA AC Europe Equity Research

(44-20) 7134-6301 22 July 2026 J P M O R G A N

matthew.lofting@jpmorgan.com

Investment Thesis, Valuation and Risks

Equinor ASA (Underweight; Price Target: Nkr340.00)

Investment Thesis

Our UW rating on Equinor is centred on: 1) Gearing vs TSR. At around $70 Brent, €30-35

EU gas Equinor exhibits EU Oils greatest 2026 re-gearing (+10pp ND/CE, avg 3.5pp). This

has returned it to the lower part of a 15-30% range and participation in Orsted’s capital

increase would consume another 200bps. This increases the tension in transitioning from

balance sheet supported to FCF led distributions because we doubt equity markets will

further reward the former as gearing normalises; 2) This increases Equinor’s reliance on

its EU gas value driver. Bearish narrative in global (ex. US) natural gas prices is expected

to persist, driven not only by rising LNG supply but also by the potential for increased

pipeline flows from Russia to Europe and China. We would prioritise global LNG (over hub

TTF) for gas exposure through OW Shell; 3) Lack of diesel hedge. In the background, our

analysis reveals limited hedge owing to Equinor’s upstream O&G-led portfolio bias.

Valuation

Our Jun-27 PT is NOK340 and set as an equal-weighted blend of NAV (LT $65/bbl) and

2027E PER. From an EU Oils target starting point of a 15% fair value discount.

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.

EU gas price is Equinor’s key value driver. Renewed strength in spot prices into the

Northern Hemisphere winter 25/26 would be a relative positive.