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TotalEnergies (TTE) Gains From Renewable Focus, Varied Assets
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TotalEnergies SE (TTE - Free Report) is set to benefit from its well-spread assets, continuous investments, cost-reduction initiatives, renewable assets and the start-up of new projects.
TTE - which currently has a Zacks Rank #3 (Hold) - is exposed to acquisition-related risks and security-related production cuts. Its withdrawal from Russia might affect profitability.
Tailwinds
TotalEnergies has one of the best production growth profiles among the oil super majors and benefits from solid production from new start-ups. The use of modern technology in drilling and efforts to lower breakeven costs are also aiding the company. With minimum exposure among oil super majors to the mature North American region, TTE’s upstream assets have lower natural decline rates and longer productive lives.
The company continues to make strategic acquisitions and agreements with existing operators and divest assets that are not in sync with its long-term objectives. During the first quarter of 2023, it acquired assets worth $3,256 million and sold assets worth $538 million, primarily consisting of the sale of 50% interest of the Marketing & Services subsidiary in Egypt. For expanding the liquefied natural gas (LNG) portfolio globally, its decision to acquire Engie’s LNG portfolio, a 37.4% stake in Adani Gas and a 6.25% stake in the North Field East LNG project in Qatar, will help.
TTE invested $16.3 billion in 2022, up 23% year over year and expects to invest in the range of $16-$18 billion in 2023, out of which $5 billion will be allocated for adding renewable assets and generating clean electricity. It strives to be a net-zero carbon emission company by 2050 and has taken the necessary steps to achieve the same. It has a portfolio of gross installed renewable power generation capacity of 18 GW at the end of first-quarter 2023 and 35 GW is under development by 2025.
Headwinds
TotalEnergies’ global presence exposes it to geopolitical crises and increasing competition from national and international oil and gas majors. The acquisition-related risks and fluctuations in hydrocarbon prices are also hurting the profitability of the company.
The Zacks Consensus Estimate for Weatherford and Archrock’s 2023 earnings per share (EPS) indicates a year-over-year increase of 455.8% and 110.7%, respectively. The Zacks Consensus Estimate for Global Partners’ EPS implies an increase of 15.6% in the past 60 days.
WFRD, GLP and AROC delivered an average earnings surprise of 0.5%, 61.6% and 8.3%, respectively, in the last four quarters.
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TotalEnergies (TTE) Gains From Renewable Focus, Varied Assets
TotalEnergies SE (TTE - Free Report) is set to benefit from its well-spread assets, continuous investments, cost-reduction initiatives, renewable assets and the start-up of new projects.
TTE - which currently has a Zacks Rank #3 (Hold) - is exposed to acquisition-related risks and security-related production cuts. Its withdrawal from Russia might affect profitability.
Tailwinds
TotalEnergies has one of the best production growth profiles among the oil super majors and benefits from solid production from new start-ups. The use of modern technology in drilling and efforts to lower breakeven costs are also aiding the company. With minimum exposure among oil super majors to the mature North American region, TTE’s upstream assets have lower natural decline rates and longer productive lives.
The company continues to make strategic acquisitions and agreements with existing operators and divest assets that are not in sync with its long-term objectives. During the first quarter of 2023, it acquired assets worth $3,256 million and sold assets worth $538 million, primarily consisting of the sale of 50% interest of the Marketing & Services subsidiary in Egypt. For expanding the liquefied natural gas (LNG) portfolio globally, its decision to acquire Engie’s LNG portfolio, a 37.4% stake in Adani Gas and a 6.25% stake in the North Field East LNG project in Qatar, will help.
TTE invested $16.3 billion in 2022, up 23% year over year and expects to invest in the range of $16-$18 billion in 2023, out of which $5 billion will be allocated for adding renewable assets and generating clean electricity. It strives to be a net-zero carbon emission company by 2050 and has taken the necessary steps to achieve the same. It has a portfolio of gross installed renewable power generation capacity of 18 GW at the end of first-quarter 2023 and 35 GW is under development by 2025.
Headwinds
TotalEnergies’ global presence exposes it to geopolitical crises and increasing competition from national and international oil and gas majors. The acquisition-related risks and fluctuations in hydrocarbon prices are also hurting the profitability of the company.
Stocks to Consider
Some better-ranked stocks in the same sector are Weatherford International PLC (WFRD - Free Report) , Global Partners LP (GLP - Free Report) and Archrock Inc. (AROC - Free Report) . Weatherford International and Global Partners sport a Zacks Rank #1 (Strong Buy) while Archrock carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Weatherford and Archrock’s 2023 earnings per share (EPS) indicates a year-over-year increase of 455.8% and 110.7%, respectively. The Zacks Consensus Estimate for Global Partners’ EPS implies an increase of 15.6% in the past 60 days.
WFRD, GLP and AROC delivered an average earnings surprise of 0.5%, 61.6% and 8.3%, respectively, in the last four quarters.