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TotalEnergies (TTE) to Report Q2 Earnings: What's in Store?
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TotalEnergies SE (TTE - Free Report) is set to report its second-quarter 2024 earnings on Jul 25, before the opening bell. The Zacks Consensus Estimate for earnings and revenues is pegged at $2.11 per share and $51.62 billion, respectively. The bottom-line estimate suggests an increase of 6.03% from the year-ago quarter, while revenues are expected to decline on a year-over-year basis.
The company reported a positive earnings surprise of 9.18% in the last reported quarter.
Per our proven model, stocks with a combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) are likely to beat on earnings. But that's not the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Price Performance
In the past six months, shares of TotalEnergies have gained 5.4% compared with the industry’s growth of 3.5%, respectively.
Image Source: Zacks Investment Research
Factors Acting in Favor
TotalEnergies is a multi-energy company that aims to achieve carbon neutrality and is gradually reducing its focus on oil products. TTE is strengthening its position in natural gas, liquefied natural gas (LNG), low-carbon electricity and new low-carbon energies to continue supplying the energy the world needs today, and accelerate the transition to a low-carbon energy supply. In the second quarter, the company is expected to have benefited from signing multiple deals to expand its multi-energy operations.
TotalEnergies continues to make strategic acquisitions and agreements with existing operators in high-potential areas and divest non-core assets that are not in sync with its long-term objectives. In the to-be-reported quarter, the company has continued to streamline its operations through acquisitions and divestments.
The new oil and gas projects that are scheduled to start in 2024 and the existing low-cost operation will continue to boost TotalEnergies' cash margins. The exploration success also ensures that the company has ample proven reserves to efficiently run its cost-effective production in the long term. It expects second-quarter 2024 production volume in the range of 2.4-2.45 thousand barrels of oil equivalents per day. The guidance takes into consideration planned maintenance downtime of some assets, offset by ramp-ups of Mero 2 in Brazil and Tyra in Denmark.
The company's utilization of cash flow to repurchase its shares and reduce outstanding debts will continue to have positive impacts on TTE’s performance.
TotalEnergies is working consistently to reduce carbon emissions and has been expanding its operation in this direction through acquisitions, partnerships and tie-ups with other operators. Widespread operations across the globe and presence in the entire value chain of LNG continue to boost its prospects.
Headwinds
TotalEnergies’ global presence exposes it to competition from national and international oil and gas majors. It has to compete with the likes of ExxonMobil (XOM - Free Report) , Shell Plc (SHEL - Free Report) and Chevron Corporation (CVX - Free Report) , among others, for acquiring hydro-carbon assets and licenses for the exploration and production of oil and natural gas, as well as for the sales of manufactured products based on crude and refined oil. These operators are also getting involved in the renewable energy space making the energy industry even more competitive.
TotalEnergies conducts its operations in more than 130 countries across five continents. On a worrying note, the company has significant production and reserves located in politically, economically and socially unstable areas, which can significantly affect production volumes.
Trading at a Premium
TotalEnergies’ shares are somewhat expensive on a relative basis, with the company’s current trailing 12-month Enterprise Value/Earnings before Interest Tax Depreciation and Amortization (EV/EBITDA TTM) being 3.88 compared with its industry average of 3.56.
Image Source: Zacks Investment Research
Bottom Line
TotalEnergiesis facing certain headwinds and is currently trading at a premium. Hence, it is advisable to hold on to this stock for the long term, given its positive fundamentals, multi-energy global assets, and special attention to generating more electricity from clean sources.
Image: Bigstock
TotalEnergies (TTE) to Report Q2 Earnings: What's in Store?
TotalEnergies SE (TTE - Free Report) is set to report its second-quarter 2024 earnings on Jul 25, before the opening bell. The Zacks Consensus Estimate for earnings and revenues is pegged at $2.11 per share and $51.62 billion, respectively. The bottom-line estimate suggests an increase of 6.03% from the year-ago quarter, while revenues are expected to decline on a year-over-year basis.
The company reported a positive earnings surprise of 9.18% in the last reported quarter.
Per our proven model, stocks with a combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) are likely to beat on earnings. But that's not the case here.
At present, TotalEnergies has an Earnings ESP of 0.00% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Price Performance
In the past six months, shares of TotalEnergies have gained 5.4% compared with the industry’s growth of 3.5%, respectively.
Image Source: Zacks Investment Research
Factors Acting in Favor
TotalEnergies is a multi-energy company that aims to achieve carbon neutrality and is gradually reducing its focus on oil products. TTE is strengthening its position in natural gas, liquefied natural gas (LNG), low-carbon electricity and new low-carbon energies to continue supplying the energy the world needs today, and accelerate the transition to a low-carbon energy supply. In the second quarter, the company is expected to have benefited from signing multiple deals to expand its multi-energy operations.
TotalEnergies continues to make strategic acquisitions and agreements with existing operators in high-potential areas and divest non-core assets that are not in sync with its long-term objectives. In the to-be-reported quarter, the company has continued to streamline its operations through acquisitions and divestments.
The new oil and gas projects that are scheduled to start in 2024 and the existing low-cost operation will continue to boost TotalEnergies' cash margins. The exploration success also ensures that the company has ample proven reserves to efficiently run its cost-effective production in the long term. It expects second-quarter 2024 production volume in the range of 2.4-2.45 thousand barrels of oil equivalents per day. The guidance takes into consideration planned maintenance downtime of some assets, offset by ramp-ups of Mero 2 in Brazil and Tyra in Denmark.
The company's utilization of cash flow to repurchase its shares and reduce outstanding debts will continue to have positive impacts on TTE’s performance.
TotalEnergies is working consistently to reduce carbon emissions and has been expanding its operation in this direction through acquisitions, partnerships and tie-ups with other operators. Widespread operations across the globe and presence in the entire value chain of LNG continue to boost its prospects.
Headwinds
TotalEnergies’ global presence exposes it to competition from national and international oil and gas majors. It has to compete with the likes of ExxonMobil (XOM - Free Report) , Shell Plc (SHEL - Free Report) and Chevron Corporation (CVX - Free Report) , among others, for acquiring hydro-carbon assets and licenses for the exploration and production of oil and natural gas, as well as for the sales of manufactured products based on crude and refined oil. These operators are also getting involved in the renewable energy space making the energy industry even more competitive.
TotalEnergies conducts its operations in more than 130 countries across five continents. On a worrying note, the company has significant production and reserves located in politically, economically and socially unstable areas, which can significantly affect production volumes.
Trading at a Premium
TotalEnergies’ shares are somewhat expensive on a relative basis, with the company’s current trailing 12-month Enterprise Value/Earnings before Interest Tax Depreciation and Amortization (EV/EBITDA TTM) being 3.88 compared with its industry average of 3.56.
Image Source: Zacks Investment Research
Bottom Line
TotalEnergiesis facing certain headwinds and is currently trading at a premium. Hence, it is advisable to hold on to this stock for the long term, given its positive fundamentals, multi-energy global assets, and special attention to generating more electricity from clean sources.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.