How Analysts Rate Total ahead of Second-Quarter Earnings

Analyst ratings for Total

In this series, we’ve examined Total’s (TOT) Q2 2018 estimates, its segmental earnings outlook, its stock performance, and dividend yield. Now, we’ll examine analyst ratings for Total.

How Analysts Rate Total ahead of Second-Quarter Earnings

The number of analysts covering Total has fallen in July. Last July, six analysts covered Total. One rated the stock a “buy.” However, only four analysts are currently covering Total. Two of these have rated it a “buy.”

Why are two of four analysts positive on Total?

Total has a robust upstream portfolio. TOT expects its hydrocarbon production to grow by a 5% CAGR (compound annual growth rate) between 2016 and 2020. Thus, production growth coupled with higher oil prices could result in higher earnings for the company in the second half of 2018. Wall Street analysts expect Total’s earnings to grow by 30% in 2018. In the first quarter, TOT’s earnings rose 8% year-over-year. In the second quarter, TOT’s earnings are estimated to rise by 52% year-over-year.

Further, Total’s financial position is strengthening. In the first quarter, Total’s adjusted earnings and cash rose. Also, Total’s total-debt-to-total capital ratio stood at ~31% in the first quarter, lower than the industry average of 33%.

Analyst ratings for peers

TOT’s peers ExxonMobil (XOM), Equinor (EQNR), and YPF (YPF) have been rated as a “buy” by 33%, 25%, and 83% of analysts covering their stocks, respectively. ENI (E), BP (BP), and Royal Dutch Shell (RDS.A) have been rated a “buy” by 50%, 45%, and 89% of analysts, respectively.

In the final part of this series, we’ll look at changes in the short interest in Total.