Barclays reaffirms its confidence in Repsol: "It's headed in the right direction: bigger and greener."

These are not good times for Repsol on the stock market. Recent concerns about the global economy have combined with a shift in OPEC's strategy , which is increasing crude oil supply, causing a drop in oil prices that is weighing on the sector as a whole, with a particular impact on the Spanish oil company .

Thus, the group led by Josu Jon Imaz has accumulated a decline of more than 20% in the last 12 months, making it one of the worst performers on the Ibex in the period.

Amid this storm, the company has had to deal with the progressive loss of support from analysts . According to Bloomberg records, only 55% of the firms covering the stock currently recommend buying its shares, compared to 76.5% a year ago.

However, in recent days, Repsol has begun to regain the favor of some of the major international investment banks. While Morgan Stanley recommended overweighting its shares on May 11, ten months after withdrawing its buy recommendation, Barclays is now showing its confidence in the Spanish oil company's prospects, also raising its recommendation to overweight, after seven months with a neutral recommendation .

"Reflecting our view that oil demand and refining margins remain resilient, we are raising Repsol's rating from balanced to overweight," note analysts at the English bank, who have given the oil company chaired by Antonio Brufau a target price of €15 per share , 28% above its current levels.

"On Repsol's recent conference call, it was reassuring to hear CEO Josu Jon Imaz clarify the company's capital framework under stress, simply to address some of the market's concerns," notes Barclays, where they argue that "the company is better positioned than its competitors " to address the current market environment.

Dividends and Upstream

This view is supported by three key insights. First, they address potential short-term drivers that Repsol could benefit from. "A better-than-expected refining margin could generate positive momentum for the stock in the short term. More importantly, management has shown confidence in its plans for a €2 billion disposal , which could help defend shareholder returns ." In this regard, the company believes that, adding dividends and estimated share buybacks, Repsol is trading at a profitability ratio of 13% and 15% for 2025 and 2026, respectively.

Furthermore, they point to the expected medium-term growth in the Upstream business (exploration, drilling, and production). "We view a strong Upstream product portfolio and significant upstream production growth in 2026/27 as potential catalysts, which in turn should boost cash flow," the group notes, mentioning, among others, the Alaska Pikka project.

Third, Barclays highlights Repsol's long-term strategic approach to its transformation. "We believe Repsol's long-term strategy points the company in the right direction: bigger and greener." In this regard, the British bank maintains that "Repsol's underlying strategic positioning is the strongest it has been in a long time , and we believe the company is leveraging its strengths ."

Repsol is trading at a dividend and buyback yield of 15% for 2026.

The bank's analysts thus demonstrate their support for Repsol's expansion plans in the renewable energy sector , with a special focus on the Iberian market, where it will concentrate a significant portion of its investments, transforming its conventional plants and creating a low-carbon platform.

"Repsol has expanded in Iberia, where it believes it is well positioned to integrate across all energy value chains and where it believes it can leverage its size and assets to build new low-carbon industrial businesses. Management indicated that its low-carbon business in Iberia is not only cash-generating, but also has the scale to leverage integration with customers' businesses," they conclude.