REPSOL: 1Q’20 TRADING STATEMENT (ANÃLISIS BANCO SABADELL)
1Q’20 Trading statement without surprises but with upside vs. sector. BUY.The 1Q’20 Trading statement (results will be released on 05/05) should not come as a surprise (-21% vs. 4Q’19 in crude oil prices; -3% in output and -16% in refining margin to US 4.70). Against this backdrop, we foresee a -49% decline in the 1Q’20 Net Profit vs. 1Q’19 (vs. our annual estimate of -37% and -42% consensus). Following a -31% correction from Feb’20 highs (in line with the IBEX and -4% vs. sector), the stock is factoring in long-term crude oil prices very much in line with REP’s cash break even (US$ 44.00). From current levels, REP should outperform its sector, as it lags behind in the recovery: crude oil has recovered 25% of the ground lost vs. record lows (to US$ 32.00), the sector +46% and REP only +37%.
Repsol is an oil and gas company. Co. is engaged in all the activities relating to the oil and gas industry, including exploration, development and production of crude oil and natural gas, transportation of oil products, liquefied petroleum gas (LPG) and natural gas, refining, the production of a wide range of oil products and the retailing of oil products, oil derivatives, petrochemicals, LPG and natural gas, as well as the generation, transportation, distribution and supply of electricity. Co. operates in more than 40 countries. Co.'s operations are divided into four segments: Upstream, Downstream, LNG and Gas Natural Fenosa.
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