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TotalEnergies (TTE) to Gain From LNG Focus & Diverse Assets
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TotalEnergies’ (TTE - Free Report) diverse assets across the globe, systematic investments, cost-reduction initiatives, an expanding portfolio of renewable assets and the start-up of projects will help boost its performance. TTE’s presence in the entire value chain of LNG gives it a competitive advantage against its peers.
However, this Zacks Rank #3 (Hold) stock has to face strong competition from other global integrated oil and gas companies.
Tailwinds
TotalEnergies has the least exposure to the mature North America region among the oil super majors. The company’s upstream assets have lower natural decline rates and longer productive lives, which give it a significant competitive edge over peers. TTE firmly focuses on investing in quality assets in the rest of the world.
TotalEnergies strives to be a net-zero carbon emission company by 2050 and has taken the necessary steps to achieve the target. TotalEnergies plans to add more renewable gross capacity in operation by 2023-end and invest $5 billion to expand the Renewable & Electricity business in 2023.
TotalEnergies is also working to expand the LNG portfolio globally. The company expects gas prices to remain high due to the need to import more LNG in Europe to replace the Russia gas imports. TTE will benefit from an increase in demand for LNG in European countries. The company will further strengthen its position in Europe in 2023 with the commissioning of two floating regasification terminals, one of which is already operational in Germany.
Preserving liquidity is the key amid the unexpected drop in oil prices and a decline in global demand due to the novel coronavirus outbreak. TotalEnergies, and other oil and gas companies have been forced to delay expansion plans and lower capital expenditure to preserve liquidity. With improving hydrocarbon prices, net cash flow at the end of 2022 was $29.4 billion compared with $15.8 billion in 2021. The improvement was primarily due to increased operating cash flow before working capital changes and an increase in net investments.
Headwinds
TotalEnergies’ global presence exposes it to competition from national and international oil and gas majors. The company has to compete with ExxonMobil (XOM - Free Report) , Shell (SHEL - Free Report) and Chevron Corporation (CVX - Free Report) for acquiring assets and licenses for the exploration and production of oil and natural gas, as well as the sale of manufactured products derived from crude and refined oil.
The Zacks Consensus Estimate for ExxonMobil, Shell and Chevron’s first-quarter earnings per share reflects increases of 24.1%, 5.1% and 6%, respectively. ExxonMobil, Shell and Chevron currently have dividend yields of 3.23%, 3.69% and 3.66%, respectively.
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TotalEnergies (TTE) to Gain From LNG Focus & Diverse Assets
TotalEnergies’ (TTE - Free Report) diverse assets across the globe, systematic investments, cost-reduction initiatives, an expanding portfolio of renewable assets and the start-up of projects will help boost its performance. TTE’s presence in the entire value chain of LNG gives it a competitive advantage against its peers.
However, this Zacks Rank #3 (Hold) stock has to face strong competition from other global integrated oil and gas companies.
Tailwinds
TotalEnergies has the least exposure to the mature North America region among the oil super majors. The company’s upstream assets have lower natural decline rates and longer productive lives, which give it a significant competitive edge over peers. TTE firmly focuses on investing in quality assets in the rest of the world.
TotalEnergies strives to be a net-zero carbon emission company by 2050 and has taken the necessary steps to achieve the target. TotalEnergies plans to add more renewable gross capacity in operation by 2023-end and invest $5 billion to expand the Renewable & Electricity business in 2023.
TotalEnergies is also working to expand the LNG portfolio globally. The company expects gas prices to remain high due to the need to import more LNG in Europe to replace the Russia gas imports. TTE will benefit from an increase in demand for LNG in European countries. The company will further strengthen its position in Europe in 2023 with the commissioning of two floating regasification terminals, one of which is already operational in Germany.
Preserving liquidity is the key amid the unexpected drop in oil prices and a decline in global demand due to the novel coronavirus outbreak. TotalEnergies, and other oil and gas companies have been forced to delay expansion plans and lower capital expenditure to preserve liquidity. With improving hydrocarbon prices, net cash flow at the end of 2022 was $29.4 billion compared with $15.8 billion in 2021. The improvement was primarily due to increased operating cash flow before working capital changes and an increase in net investments.
Headwinds
TotalEnergies’ global presence exposes it to competition from national and international oil and gas majors. The company has to compete with ExxonMobil (XOM - Free Report) , Shell (SHEL - Free Report) and Chevron Corporation (CVX - Free Report) for acquiring assets and licenses for the exploration and production of oil and natural gas, as well as the sale of manufactured products derived from crude and refined oil.
The Zacks Consensus Estimate for ExxonMobil, Shell and Chevron’s first-quarter earnings per share reflects increases of 24.1%, 5.1% and 6%, respectively. ExxonMobil, Shell and Chevron currently have dividend yields of 3.23%, 3.69% and 3.66%, respectively.