Repsol shares: Price analysis before buying or selling

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ISIN code: ES0173516115

Ticker: BME: REP

Index or market: IBEX35

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Elements to consider before selling or buying Repsol shares

Analysis N°1

First of all, we will keep an eye on the evolution of the number of oil explorations that may allow Repsol to increase its turnover and improve its order book.

Analysis N°2

Similarly, the expansion of refineries around the world will be closely monitored, taking into account the various competitors in this segment and the evolution of market shares.

Analysis N°3

It goes without saying that the Repsol Group's activities are highly subject to strict regulations from the various governments. Therefore, it will be essential to take into account any changes in legislation or standards in this area, especially at a time when the environmental stakes are high due to climate change.

Analysis N°4

The increase in the number of electric or non-petrol vehicles is also an element to be monitored, as it can have a very strong impact on the activities of companies such as Repsol, which depend to a large extent on the demand for thermal vehicles.

Analysis N°5

Finally, it will also be important to take into account the strategic objectives published by the group with the implementation of certain restructuring plans, cost reduction and any other strategy likely to make it more profitable. It will then be possible to compare these elements with the actual results and actions of this company.

Analysis before buying or selling Repsol shares

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General presentation of Repsol

As Repsol is the result of a merger of several companies, its activities are divided into different groups within the same business sector:

Refining and distribution, with several million tons of refined oil and several million tons of petroleum products sold per year. It should be noted that Repsol is also active in petrochemicals.
Natural gas distribution and electricity generation.
Natural gas liquefaction, transportation and regasification
Natural gas and oil development and production, with over 559,000 barrels produced daily in recent years.

In order to carry out these various activities in different parts of the world, Repsol currently has seven subsidiaries, in which it has a different percentage of ownership. These are: Repsol Brasil, Petronor, Dynasol, Repsol Comercial de Productos Petrolíferos, Solred, Repsol Comercializadora de Gas and Repsol Exploración Perú.

The company makes most of its profits in Spain, but it is also active in the South American market and in Europe in general. It is present in more than 30 countries and employs more than 37,000 people worldwide.

Repsol shares are currently listed on the Spanish Mercado Continuo market and are included in the calculation of the IBEX 35 national index.

Photo credits: ©buenoalvaro/123RF.COM

The major competitors of Repsol

Let's find out in more detail who are the main competitors of the Repsol group in its sector of activity with the main companies specialised in the oil and refining sector.

Exxon Mobil

This American oil and gas company is based in Dallas and is currently one of the 10 largest companies in the world in terms of profits. It is listed on the NYSE in the US.

Shell

Also known as Royal Dutch Shell, this company is an Anglo-Dutch oil company and one of the largest multinational corporations. It is actually a group of companies owned by a parent company.

BP

Another major competitor of Repsol is BP, a British oil exploration, extraction, refining and sales company established in 1909. The group has become the largest in the UK and the third largest oil company in the world. Internationally, BP operates in over 100 countries and employs around 79,700 people.

Saudi Aramco

This is a Saudi national oil company specializing in hydrocarbons which holds almost all of the kingdom's hydrocarbon resources. It is also the world's largest oil company in terms of production. It operates several fields in the country.

Valero Energy Corporation

Finally, we will also keep an eye on Valero Energy Corporation, an American company that includes Valero, Diamond Shamrock, Ultramar and Shamrock and Beacon.

Petrochina

Finally, we should also follow Petrochina Company Ltd which is the listed part of the China National Petroleum Corporation and is also the largest oil group in China to date. The share price is listed on the New York, Hong Kong and Shanghai stock exchanges.

The major partners of Repsol

After having discovered Repsol's main adversaries, we propose to take a look at its strategic allies with two concrete examples of partnerships signed recently.

Honda

First and foremost and in 2020, the Repsol Group has extended its partnership as the main sponsor of the official Honda team for the next few seasons and therefore until the end of 2022. The previous contract renewal between the two companies was also for two seasons until the end of 2020 and had been announced in 2018. Due to the Covid-19 crisis, the announcement of this recent renewal took longer as several multinationals prioritized their operations which called into question their involvement as sponsors. The agreement is worth between 12 and 14 million euros, which is much less than other agreements of this type.

Emerson

Another interesting partnership has been signed in 2019 this time, with Emerson which is a global engineering and technology company. This involves the formation of a strategic alliance with the aim of providing advanced subsurface geophysical technologies to significantly reduce the time to first oil exploration and production. To achieve this important goal, Emerson will work with Repsol to implement and deploy advanced subsurface imaging technologies, supported by core technologies developed by Repsol under the Kaleidoscope innovation project. These technical advances will then be used by a wide range of Repsol's geoscientific community as well as by oil and gas companies that will license the technologies. They combine the latest advances in advanced visualization, high-performance computing and cloud-based delivery.

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The factors in favour of a rise in the Repsol share price:

In order to help you better understand Repsol's stock in your analysis of it, you should know that it is essential to have a good understanding of this company and its ability to face the challenges and opportunities ahead. The best way to do this is to know its strengths and weaknesses. That's why we're going to take a look at the major strengths and weaknesses of Repsol.

Let's start this exercise by summarizing the main assets that this Spanish company has today and that could allow it to grow in the years to come.

First of all, the positioning of this company in its sector of activity and on the international market is of course one of its major assets. The Repsol Group is one of the major oil and gas companies and operates all over the world.
Another of the group's strengths is its strong distribution with a well thought-out strategy that allows it to reach a wide target of customers.
The reputation of the Repsol group is also a strong point worth noting. In fact, the group has a strong brand name that is well known even outside Spain, which once again makes it easier for it to gain the trust of consumers.
The strategic operations carried out by the Repsol group with the aim of winning new markets or gaining in popularity and profitability are also rather favourable elements for its growth. In particular, the numerous acquisitions and mergers carried out in the past, as well as other strategic operations such as partnerships in certain international sports events, are worth mentioning here.

The factors in favour of a drop in the Repsol share price:

Now that you know more about the benefits of Repsol stock and the company's strengths, we'll take a closer look at its main weaknesses:

Firstly, the dependence of Repsol's activities on the oil market is undoubtedly one of its most important weaknesses, on the one hand because of the decrease in world reserves, but also because of the energy change in progress and the drop in the price of black gold for some time.
Finally, the second major weakness of the Repsol share concerns the environmental risks of its activities, which could lead to constraints from the regulatory authorities.

As you can see, Repsol currently has more strengths than weaknesses. However, the strength of these weaknesses can carry a lot of weight and it is essential to take them into account before taking any position on this stock.

The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions or a solicitation to buy or sell an asset.

Frequently Asked Questions

Where and how is the Repsol share price quoted on the stock market?

The country where Repsol shares are listed is of course Spain, as it is a Spanish-based company. Specifically, Repsol is listed on the Spanish Mercadi Continuo, on the Madrid stock exchange. However, due to the high market capitalisation of this company, Repsol is also included in the national benchmark Ibex 35 stock index and in other minor stock indices such as the Stoxx Spain 20.

How have Repsol shares performed in recent years?

To know more about the possibilities of the Repsol share, it is interesting to know its past performances. It is worth noting that over the last year (as of October 30, 2020), the performance of this stock has been -61.19%. Over the last two years, this performance has also been negative with -64.69%, similarly and over three years, this performance has been -62.77%. Finally, the performance of the Repsol share price over 5 years was -49.91%.

Where does the Repsol group operate?

The Repsol group is an international group that markets its products all over the world. But its production is also located in different countries. In Spain, the group owns and operates plants in Ponferrada in the province of Leon, in Los Barrios near Cadiz and in Igualada near Barcelona. Abroad, the Repsol group also operates a production plant in South Africa and another in the United States, in Kentucky. These Spanish and other Repsol Group production plants are also considered and recognised as being among the most efficient in the world.

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Analysis before buying or selling Repsol shares