JPMorgan Sees 11–17% Upside for Shell, Galp, TotalEnergies and Eni
JPMorgan analysts upgraded Eni, raised TotalEnergies, and reiterated overweight on Shell and Galp, with price targets implying up to 17% upside and 4–6% yields. They warn Strait of Hormuz supply risks could boost free-cash-flow yields by 2 percentage points per $10 oil gain.
1. Analyst Ratings and Targets
JPMorgan analysts upgraded Eni to overweight, raised TotalEnergies to overweight, and reiterated overweight on Shell and Galp Energia. Updated price targets imply up to 17% upside for Shell, 15% for Galp, 12% for Eni and 11% for TotalEnergies, with dividend yields in the 4%–6% range.
2. Geopolitical Risk Impact
The team cites mounting supply risks through the Strait of Hormuz after recent military strikes effectively shut this key passage, which normally handles around 20% of global oil and LNG flows. Analysts warn that any further disruptions could sustain elevated crude prices and strengthen returns for major producers.
3. Cash Flow Leverage
JPMorgan estimates that every $10 rise in crude Brent adds roughly two percentage points to free cash flow yield for European oil majors. They project that a return to $100 Brent would push free cash flow yields toward 15%, highlighting potential for materially improved cash generation.