TotalEnergies SE ADR

TotalEnergies had a mixed result in the last quarter with revenues below expectations given that Brent was down 9% and European gas dropped by 50% compared to the previous quarter. However, it did manage an earnings beat. European gas has been above $15 per barrel and Brent above $18 per barrel, which is still high by historical standards. In March, oil prices fell below $17.5 per barrel and rebounded in April. After several quarters of quite high diesel cracks in the context of high product inventories, fears of economic slowdown, largely fueled by Chinese exports as well as the faster-than-expected reorganization of Russian flows that follow the European environment, refining margins are easing down. Due to mild weather, gas prices fell. For the first time, TotalEnergies is reporting Integrated Power and Integrated LNG as independent segments. Integrated Power’s postpaid net adjusted operating income was higher as compared to the previous year. Net electricity generation was up due to rising electricity generation from renewal. This quarter, TotalEnergies launched the fees for Papua LNG. Renewable power generation capacity increased by over 1 gigawatt to the previous quarter. The company further launched its largest battery energy storage project in Europe. We give TotalEnergies a ‘Hold’ rating with a revised target price.