Repsol (REP SM): Buy: Refining remains resilient

Research evidence excerpt

Repsol (REP SM): Buy: Refining remains resilient

le Alpha consensus of EUR2.63bn, impacted by working capital build of

52-WEEK PRICE (EUR)

EUR1.35bn, making the pre-WC CFFO EUR3.29bn, which was robust. Organic Capex

of EUR849m was in line with Visible Alpha estimates. Despite the large working capital 32.00

build, net debt (inc. leases) decreased to EUR3.67bn, down from EUR4.80bn at end 21.00

1Q26 though not as positive as VA estimates of a decrease to EUR3.1bn. Gearing (inc. 10.00

leases) declined to 11.3% from 14.3% q/q. Divisionally, Industrial’s earnings beat of 14%, 07/25 01/26 07/26

coupled with a strong Customer beat of 11%, helped offset the 15% miss in Upstream. Target price: 29.00 High: 26.41 Low: 12.90 Current: 26.41

Source: LSEG IBES, HSBC estimates

Conference call highlights: Repsol’s 2Q indicator refining margin averaged USD14/b

with a USD10.3/b premium, of which cUSD2.0-2.2/b was driven by biofuels. July margins

Sadnan Ali*, CFA

have been stronger, averaging USD34/b with a USD9/b premium. Limited refining Global Oil & Gas Analyst

HSBC Bank plc

maintenance in 2H26 supports greater availability. Management expects Upstream sadnan.ali@hsbc.com

production to reach c600kbd by year-end, though it is maintaining its conservative 560- +44 207 9910569

570kbd guidance range for 2026. Additional colour on Alaska highlights resource Kim Fustier*

longevity through the next decade, via the Pikka, Quokka, and Horseshoe assets. Senior Global Oil & Gas Analyst HSBC Bank plc

kim.fustier@hsbc.com

Maintain Buy rating; raise TP to EUR29.00 (from EUR26.50): We raise our target price +44 20 3359 2136

to EUR29.00 (from EUR26.50), reflecting higher refining earnings for 2H26 and into 2027 Ujjwal Sharma*

as well, as product markets are poised to remain tighter for longer.