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Oct. 11, 2021, 8:59 a.m. EDT

JPMorgan puts these two European energy giants on ‘catalyst watch’ ahead of earnings

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By Steve Goldstein

Analysts at JPMorgan Cazenove put Royal Dutch Shell and Eni on their “catalyst watch,” their short-term conviction indicator, ahead of both oil group’s earnings at the end of the month.

Shell’s /zigman2/quotes/204253697/delayed UK:RDSB +2.42% /zigman2/quotes/207682964/composite RDS.B +1.18% third-quarter update is “positively skewed,” with the broker expecting $14 billion in cash flow from operations excluding working capital, and adding Shell’s LNG trading adds further upside risk. JPMorgan also is expecting a 2022 buyback of $9.2 billion, which is ahead of estimates of $7.8 billion, and an improving fourth-quarter operational outlook.

JPMorgan also expects Eni’s /zigman2/quotes/209584888/delayed IT:ENI +2.34% earnings to beat expectations, by about 9%, due to increased production as well as a lower tax rate. Last week’s announcement that Eni is set to list a minority stake in its retail and renewable business in 2022 will further support the stock, as well as the possibility of more buybacks and dividends, the analysts said.

The analysts also suggest long positions on BP /zigman2/quotes/202286639/delayed UK:BP +3.16% and Repsol /zigman2/quotes/202941606/delayed ES:REP +2.10% but are sellers of strength in Equinor /zigman2/quotes/203290881/delayed NO:EQNR +3.30% , as rate of change on the EU gas trade peaks out.

The oil sector /zigman2/quotes/210599627/delayed XX:SXEP +2.02% was one of the strongest in Europe outside of basic resources, but technology shares /zigman2/quotes/210599534/delayed XX:SX8P +1.60% slumped on concerns over rising bond yields.

The Stoxx Europe 600 /zigman2/quotes/210599654/delayed XX:SXXP +0.69% fell 0.4% to 455.39.

Of the major regional indexes, the German DAX /zigman2/quotes/210597999/delayed DX:DAX +0.16% declined 0.5%, the French CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 +0.54% declined 0.3% while the U.K. FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +0.94% increased 0.3%.

/zigman2/quotes/204253697/delayed
UK : U.K.: London
£ 1,594.00
+37.60 +2.42%
Volume: 5.57M
Nov. 29, 2021 4:35p
P/E Ratio
39.40
Dividend Yield
0.04%
Market Cap
£119.84 billion
Rev. per Employee
£1.52M
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/zigman2/quotes/207682964/composite
US : U.S.: NYSE
$ 42.50
+0.49 +1.18%
Volume: 2.02M
Nov. 29, 2021 3:51p
P/E Ratio
36.28
Dividend Yield
3.85%
Market Cap
$159.82 billion
Rev. per Employee
$1.95M
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/zigman2/quotes/209584888/delayed
IT : Italy: Milan
11.80
+0.27 +2.34%
Volume: 23.22M
Nov. 29, 2021 5:35p
P/E Ratio
26.71
Dividend Yield
5.68%
Market Cap
€41.19 billion
Rev. per Employee
€1.40M
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/zigman2/quotes/202286639/delayed
UK : U.K.: London
327.70 p
+10.05 +3.16%
Volume: 60.62M
Nov. 29, 2021 4:35p
P/E Ratio
13.99
Dividend Yield
5.00%
Market Cap
£62.52 billion
Rev. per Employee
£2.21M
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/zigman2/quotes/202941606/delayed
ES : Spain: Madrid
9.91
+0.20 +2.10%
Volume: 8.23M
Nov. 29, 2021 5:38p
P/E Ratio
12.08
Dividend Yield
2.70%
Market Cap
€14.47 billion
Rev. per Employee
€1.40M
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/zigman2/quotes/203290881/delayed
NO : Norway: Oslo
kr 227.15
+7.25 +3.30%
Volume: 4.93M
Nov. 29, 2021 4:29p
P/E Ratio
33.00
Dividend Yield
N/A
Market Cap
kr713.85 billion
Rev. per Employee
kr20.23M
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/zigman2/quotes/210599627/delayed
XX : STOXX
269.16
+5.34 +2.02%
Volume: 0.00
Nov. 29, 2021 5:50p
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/zigman2/quotes/210599534/delayed
XX : STOXX
792.10
+12.50 +1.60%
Volume: 0.00
Nov. 29, 2021 5:50p
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/zigman2/quotes/210599654/delayed
XX : STOXX
467.24
+3.19 +0.69%
Volume: 0.00
Nov. 29, 2021 5:50p
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/zigman2/quotes/210597999/delayed
DAX
DX : Xetra Indices
15,280.86
+23.82 +0.16%
Volume: 95,659
Nov. 29, 2021 6:30p
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/zigman2/quotes/210597958/delayed
FR : France: Euronext Paris
6,776.25
+36.52 +0.54%
Volume: 108,062
Nov. 29, 2021 6:05p
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/zigman2/quotes/210598409/delayed
UK : FTSE UK
7,109.95
+65.92 +0.94%
Volume: 828,565
Nov. 29, 2021 4:59p
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