REPYF - Repsol: Focus On Renewable Segment Results In 100%+ Upside And Asymmetric Risk/Return Profile
- Repsol's 5-year transformation plan will see it eightfold the EBITDA in the renewables segment.
- The company is now trading at a free cash flow yield of 30% using the base case scenario for 2025 and 25% in the conservative scenario.
- The transformation plan is self-funding: no new debt will be needed, and this could reduce the debt ratio by 2025 to less than 1X EBITDA.
- Repsol is no longer the sleepy Iberian oil and gas player but will transform itself into a strong cash flow-generating multi-layer business.
- I see 200% upside potential in the base case scenario and about 150% in the bear case scenario (which uses $40 Brent oil) as the downside from here is very limited.
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Repsol: Focus On Renewable Segment Results In 100%+ Upside And Asymmetric Risk/Return Profile