TotalEnergies SE TTE is set to report first-quarter 2024 earnings on Apr 26, before the opening bell. The Zacks Consensus Estimate for earnings is pegged at $1.96 per share on revenues of $59.64 billion. The top and bottom-line estimates suggest a decline of 4.7% and 24.9%, respectively, from a year ago.
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 three months, shares of TotalEnergies have risen 12.1% compared with the industry’s and the S&P 500’s growth of 11.4% and 3.8%, respectively.
Image Source: Zacks Investment Research
Factors Acting in Favor
Total Energies 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 liquefied natural gas (LNG) continues to boost its prospects.
This multi-energy company aims to achieve carbon neutrality and is gradually reducing its focus on oil products. TTE is strengthening its position in natural gas, LNG, low-carbon electricity and new low-carbon energies in order to continue supplying energy the world needs today and accelerate the transition to a low-carbon energy supply.
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 over the long term. It expects production volume of 2024 in the range of 2.4-2.5 Mboe/d.
The company’s utilization of cash flow to repurchase shares and reduce outstanding debts will continue to have positive impacts on its performance.
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, Shell Plc SHEL, Chevron CVX, among others, for acquiring hydro-carbon assets and licenses for the exploration and production of oil and natural gas, as well as for the sale of manufactured products based on crude and refined oil.
An increase in competitive pressure from its peers could impact sales, finally impacting TTE’s margins and market share in the global business.
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.
Bottom Line
Despite some headwinds, it is advisable to hold on to this stock for the long term, given its positive fundamentals, multi-energy global assets, ability to increase shareholders value and special attention to generate more electricity from clean sources.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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