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Repsol, at 6x earnings, is not even pricing in a return of Venezuelan growth. Per @staunovo, Repsol has won back control of its Venezuelan oil operations under a deal with the government that includes a guaranteed payment system and a plan to triple production. That is kind of huge for a stock this cheap. x.com x.comÂ
Petrobras looks cheap against its earnings at 6x forward earnings, versus the roughly 14x oil and gas producers usually get. Applying 14x to next year's estimated $4.14 a share gives a fair range of about $51 to $65, leaving the stock 52% below the low end. The view rests on valuation levels from reported earnings and revenue estimates only, not fundamental work. x.comÂ
European refiners Repsol and OMV offer better risk/reward and could rally sharply if the US imposes export curbs. x.comÂ
Oil majors such as Shell, BP, ExxonMobil and Chevron deserve their multiples because they have consistently generated 10%+ returns across complete energy cycles. They are integrated, now diversified, and control a key commodity for decades ahead. Investors will do fine if they hold for the long term. x.comÂ
TotalEnergies looks cheap against its earnings at 11x trailing and 8x next year's, while oil and gas producers usually get 14x. Applying 14x to mid-cycle EPS of $8.01 gives a fair range of $98.74 to $125.67 versus $90.94 now. Trailing and forward earnings differ by 34%, widening the range. This is a valuation read only, not fundamental work. x.comÂ
Transocean looks compelling because offshore drillers trade like distressed cyclicals even as they add backlog. It sits near 0.93x book and 1.8x sales, with generalists scarred by 2020-21 bankruptcies, yet it has added about $1.6B of backlog since April, with recent day rates near $550k. Management guides utilization above 90% by late 2026, near 100% in 2027, and approval of the Valaris merger could re-rate it. Oil is the key risk: WTI below about $60 would bring capex cuts. x.comÂ
With crack spreads this high, the market should realize how undervalued Delek US Holdings was and still is, despite skepticism last year at $11. Diesel cracks hit a record $102, per a post the author replies to. x.comÂ
BP has further to go as new CEO Meg O'Neill resets it into a traditional oil and gas major focused on returns and cash flow. Renewable spending is being cut by $5-10 billion while oil and gas investment rises 20% to $10 billion a year. BP plans $20 billion of asset sales by 2027 and aims to cut debt from $22 billion to $14-18 billion, pausing buybacks. Continued instability in the Strait of Hormuz adds support, though the climate pullback faces ESG pushback. x.comÂ
Par Pacific offers a downstream way to play oil. The refiner just spun off a low-margin business and has the strongest free cash flow along with the lowest P/E and price-to-sales ratios in the space. Its price broke out this week. x.comÂ
Vista Energy grows over 20% yet trades at about 10x earnings, while most big oil companies trade at 20-25x with single-digit growth. It also works as an oil hedge. x.com x.comÂ
US energy stocks are being steadily accumulated after a 17-year base, and that base will not resolve in a month. The sector broke out this year and pulled back on contracting volume, which is digestion, not distribution. Energy trades near 13x earnings versus about 20x for hyperscalers. Stocks now rise with oil and get bought back when oil falls. Tech is priced for the cost of capital to come down; energy for the reason it will not. x.com x.com x.comÂ