EQNR: Model update

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EQNR: Model update

Equinor ASA

Target/Upside/Downside Scenarios Investment summary

We have an Underperform rating on Equinor and a 12-monthEquinor ASA

price target of NOK360 per share.

500 125 Weeks 15FEB24 - 07JUL26

450 Key points to the investment case:

350 TARGETTARGET 360.00360.00 • Moving from extraordinary times… Following the

CURRENTCURRENT 326.30326.30 extremely strong cycle for European gas prices in recent 300

250 years, Equinor moved into a strong net cash position,

200 allowing for a super-normal distribution cycle, with over

150 $50bn returned to shareholders over 2022-25. This should

60m be commended, as we have seen plenty of examples

40m 20m where companies squander “one-off” cash windfalls. In

2024 2025 2026 this instance, we think the management team has gained

F M A M J J A S O N D J F M A M J J A S O N D J F M A M

J J in credibility, however we see Equinor moving to less EQNR NO Rel. NORWAY OSE ALL SHARE MA 40 weeks

Source: Bloomberg and RBC Capital Markets estimates for Target extraordinary times and a more “normal” balance sheet

position. Equinor’s recent foray with a 10% interest in OrstedValuation

for $2.5bn also introduces more uncertainty into future usesWe value EQNR based on a 2027E EV/DACF multiple of 5.0x

of free cash flow than we’ve seen in the recent past, andfor its core business along with a build-up of its low carbon

similar actions could weigh on sentiment.portfolio, adjusted for debt. Our target multiple is at a slight

• Upstream portfolio maturing in Norway. Equinor has haddiscount to its historical average to reflect more modest

significant success in Norway on the exploration front, thegrowth going forwards, as well as some uncertainty on project

most prominent of which was the Johan Sverdrup discovery.execution with Empire Wind.