Repsol (REP.MC): The Leading IOC Equity, But Still Offers Significant Value

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Repsol (REP.MC): The Leading IOC Equity, But Still Offers Significant Value

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24 Jul 2026 00:00:00 ET │ 14 pages

Repsol (REP.MC)

The Leading IOC Equity, But Still Offers Significant Value

CITI'S TAKE

Buy Repsol was the top-performing Global IOC equity in 2025 and again YTD

2026. While it is tempting to dismiss this performance as reflecting the Catalyst Watch: Upside, expires 09-SEP-26

company’s operating leverage to elevated refining margins, we would Price (23 Jul 26 17:30) €26.41

argue much of the gain has come from ‘broadening’ of investor Target price €30.00↑

engagement in the energy sector. At the start of 2025, Repsol was a cheap from €27.00

equity with a decent narrative; +120% equity performance later we believe Expected share price return 13.6%

it is still a cheap equity and, arguably, with an even better narrative. Expected dividend yield 4.1%

Expected total return 17.7%

Downstream in Context — Record margins have helped Repsol’s Downstream Market Cap €29,193M

business (refining, marketing and chemicals) generate record CROCI and support

US$33,314Mroughly 55% of total corporate CFFO. Yes, this is probably close to peak profitability,

so shouldn’t be capitalized, but we note the market looks to be doing so in other

energy equities. North American pure-play Downstream businesses are trading at

13-14x trailing CFFO; apply a European industrial discount of 40% (i.e. to 8x) and

then we believe it is not unreasonable that Repsol’s Downstream business could be Alastair R SymeAC

valued at €27B. +44-20-7986-4030

alastair.syme@citi.com

Improved Upstream — Given Repsol’s current EV is only €32B, the implication is Kate O’Sullivan

that Repsol’s core Upstream business (45% of tailing 12MCFFO) remains severely

mis-priced.