STOHF - Equinor's Q4: A Buyable Sell-Off

2024-02-13 15:50:28 ET

Summary

• Equinor announced Q4 and full-year FY23 earnings last Wednesday and the report was generally considered a miss.
• A look under the hood shows strong operational performance and a one-off tax hit was responsible for missed expectations.
• However, a significantly cut in the extra-ordinary dividend was real and did cause a significantly sell-off in the stock price.
• Yet EQNR's yield is still very attractive and the outlook for capital gains is now relatively compelling. The shares could easily deliver total returns of 20% this year.

Equinor ( EQNR ) announced its Q4 and full-year 2023 results last Wednesday and they generally missed expectations due to large one-off tax charges. That, combined with a significant cut in the extra-ordinary dividend, caused the shares to sell-off 7.6% last week after initially trading higher going into the report (see chart below). EQNR is now down ~25% from its 52-week high of $34.73 set last October. It's also down about the same amount from the last time I covered the company on Seeking Alpha (see Equinor: King of EU Gas Is Robustly Undervalued ) - mostly because, as you will see, the price of natural gas has plummeted. As a result, the shares are now significantly undervalued in my opinion and are a extremely attractive for income oriented O&G investors. Today, I'll explain why that is the case....

For further details see: