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Total Stands Tall with 100% ‘Buy’ Ratings


Dec. 4 2020, Updated 10:53 a.m. ET

Analysts’ ratings for Total

In this series, we’ll rank seven global integrated energy companies based on the number of “buy” ratings they’ve received from Wall Street analysts. Total (TOT), Suncor Energy (SU), and Royal Dutch Shell (RDS.A) are the top three companies, and they’ve been rated as “buys” by 80% or more of analysts. Let’s start with Total.

Total has been rated as a “buy” by all the analysts covering its stock. It has the fourth-largest market cap of ~$147 billion among the seven integrated energy stocks under review.

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The number of analysts that have rated Total as a “buy” has risen in the past year. In December 2017, six analysts were tracking Total, and only one (or 17%) rated the stock as a “buy.” However, now, five analysts are covering the stock, all of whom have rated it as a “buy.” It’s clear that analysts’ ratings have improved.

Though Total stands first in the ranking of the seven integrated energy stocks under review in this series, the stock has quite low coverage compared to its peers. Its mean target price of $71 implies a potential 30% gain from its current level.

Why have analysts turned positive on Total?

Total posted a robust set of numbers in the third quarter. Total’s earnings rose and surpassed the estimates. Its third-quarter EPS were its highest quarterly EPS since the third quarter of 2015. Its hydrocarbon production is slated for growth with its major upstream projects coming online.

Total’s upstream projects Kaombo in Angola and Train II of Yamal LNG in Russia recently began production. The company also acquired the Direct Energie and LNG (liquefied natural gas) portfolios of Engie, strengthening its global LNG position. Analysts expect Total’s earnings to rise 31% in 2018.

Also, Total has the financial strength to continue its growth spree. Total’s debt-to-capital ratio stood at 32% in the third quarter, below the industry average of 33%. Moreover, Total’s cash flow from operations rose 31% year-over-year to $5.8 billion in the quarter, improving its liquidity position.

Overall, analysts have turned positive on Total likely due to its robust earnings, growth activities, and strong financials.


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