Being one of the most recommended values by the most famous financial analysts, the great surprise in recent weeks is that the price of their products does not stop falling. To be in 14 euro levels, when a few days ago it was above 15 euros per share. Below we are going to offer some of the reasons why Repsol has not gained a foothold in the equity markets. In a context where the selective index of national equities is being more favorable than initially expected. At levels that oscillate between 9.000 and 9.400 points.
But in the end it has not been what a good part of the small and medium investors expected and who were in a position to make their savings profitable. By having your target price above 17 euros per share, in the latest reports made by the different financial intermediaries. But its behavior has been worse than the rest of the stocks that are integrated in the Ibex 35. With a divergence that at the moment is above five percentage points.
On the other hand, it is also important to emphasize that this security offers a lot of liquidity and this helps investors to adjust their purchase and sale prices. Like their titles they move very frequently to change hands. Not surprisingly, Repsol is one of the blue chips of Spanish equities, along with other securities such as Endesa, Santander, BBVA or Iberdrola, among the most important of the Ibex 35. Being the only value of the powerful sector linked to the commercialization of oil, despite lacking competition from other companies with similar characteristics.
Repsol: upside potential
If this listed company is characterized by something, it is because it is one of those that offers the greatest potential for revaluation. With levels that oscillate between 5% and 15%, based on the reports issued by the different agents that are in the equity markets. Well, in this sense it should be noted that if you take positions you have more to lose than to win at this time. Unless there is a change in trend, at least in the medium and long term that makes you look at this listed with a little more optimism. And in this way they are in a position to reach their target price in a more or less short period of time.
On the other hand, it must be emphasized that this value is highly influenced by the demand for energy in the world and any downward deviation can lead to a very significant drop in the equity markets. Especially if you are accompanied by a price cut of the main stock market indices around the world and, specifically, Spanish. They are variables that in the end will be fundamental for the price of this important value on the Spanish stock market. With short-term prospects, for the moment very bleak.
Oil price dependence
Another aspect on which its price depends is the state of oil in the financial markets. In this sense, the average price of a barrel of OPEC in November it has risen to 62,76 dollars a barrel so far in November, from 59,87 US dollars in August, 4,83%. In the last twelve months the price of a barrel of OPEC oil has fallen by 3,93%. While on the other hand, from 2003 until now, 131,22 US dollars has been the highest price at which a barrel of crude oil has traded, in April 2003, while in April 2003.
This means in practice that the price of crude oil has not risen as some market analysts expected and therefore it has not translated into an improvement in the prices of this oil company. If not, on the contrary, it has regressed in its valuation contrary to the indications of financial intermediaries. From where you have to measure up to what levels the national oil company can reach at these precise moments. With an open path that the decreases can reach very close to the levels that have around 13,50 euros for each share.
Distribution of 0,45 euros in dividend
Another novelty that this Ibex 35 company has brought us is that its Repsol board of directors has approved the payment of remuneration to shareholders within the framework of its 'Flexible Dividend' program y under the formula of 'scrip dividend', equivalent to 0,45 euros gross per share and charged to the year 2019. As the company has informed the National Securities Market Commission (CNMV), in exercise of the powers delegated by the general meeting of shareholders, the board has agreed to set the market value of the capital increase at 687,3 million euros.
It is one of the most attractive account charges in the Spanish selective index and therefore one of the incentives to take positions in the stock from now on. By generating an annual and guaranteed return every year very close to 6,50%, and within the top ten of the Spanish companies that are integrated in the Ibex 35. So that in this way, you can obtain profits on a recurring basis and whatever happens in the equity markets. While another part, its forecasts for the future indicate and with regard to the objective of organic investments for the total of this year, it places it at 3.500 million euros, of which 2.300 million euros correspond to 'Upstream' and 1.200 million euros to 'Downstream'.
Electric car damage
These drop in the price of Repsol securities can also be explained by the fact that the irruption of the electric car can benefit the companies of the electric sector, as is happening in these months. By revaluing these above 20% in the last twelve months. Something that has not happened with the oil companies, but on the contrary they have fallen in their positions on the stock market. As an indirect effect on the change in energy consumption and that has changed the purchasing decision in a large part of the small and medium investors.
This newsworthy fact implies that in the coming years there will be less dependence on oil and this in the long run should influence its price to a greater or lesser extent. From this point of view, it can be a problem for companies in this energy sector to the detriment of electrics. While on the other hand, it is also necessary to influence this class of companies linked to crude oil. They have turned their gaze to the commercialization of electricity to recharge cars, as has been done at Repsol. In either case, it is now a bit further from its target price than was one of its goals for the next few months.
Finally, remember that this is a very volatile value that is not intended for the more defensive or conservative retail profiles. Where the main strategies in the stock market are developed to avoid unwanted actions in the operations and that can make you lose a lot of money in them. For which it will be very practical to impose a loss limitation order so that the losses do not go more than the limits allowed by your general interests. And in this way, you can exit their positions and return to other values that at those times are more attractive and prone to make the savings profitable from now on. Being at the end of the day one of the objectives of any small and medium investor, and apart from other approaches in investing in the stock market. As an indirect effect on the change in energy consumption and that has changed the purchasing decision in a large part of the small and medium investors.
Net profit of almost 1.500 million
Repsol obtained a net profit of 1.466 million euros in the first nine months of the year, compared to 2.171 million in the same period of the previous year. On the other hand, the absence of capital gains, such as that from the sale in 2018 of your participation in Naturgy, and the lower valuation of hydrocarbon inventories due to the fall in crude prices, had a negative comparative effect of more than 600 million euros compared to the previous year.
While on the other hand, the adjusted net profit, which specifically measures the progress of the company's business, stood at 1.637 million euros, compared to the 1.720 million achieved between January and September 2018. Operating cash flow increased 22%, reaching 4.074 million euros. For Repsol's CEO, Josu Jon Imaz, "the robust performance of cash flow, in a weaker macroeconomic environment, shows the strength of our strategy."