EUR 400.00 For Business Accounts Only

REPSOL: PROMISING ANTIVIRAL MEASURES (ANÁLISIS BANCO SABADELL)

Savings that could add up to +11% to our T.P. of € 10.00/sh. (+37% upside). BUY.
The company announced yesterday a series of measures to tackle the effects from the COVID-19 crisis. It maintains its shareholder remuneration commitment for 2020 (€ 1.00/sh.; 13.7% yield) and it will complete the DPS’19 with a € 0.55/sh. payment in July in scrip format (in line with expectations, although questioned: 9% and 7.5% yield). The group also maintains its plan of cancelling the necessary own shares to offset the dilutive impact from the payment in scrip format. However, it has withdraw from the AGM agenda (08/05) the buyback and cancellation proposal of 5% of additional capital to be executed in the 2H’20, which is no surprise as it is in line with the decisions being made by its peers. We cut our EPS’20 by -52% and -30% on average in the medium-term. We expect a very positive market reception.
REP expects to reduce CAPEX’20 by €>1 Bn (-19%) vs. our estimate of € 750 M. Moreover, we stress other unexpected measures such as cutting OPEX by €