TotalEnergies SE: Undervalued Cash-Return Powerhouse with Growing Free Cash Flow and Integrated Power Upside

In a report released today, Christopher Kuplent from Bank of America Securities reiterated a Buy rating on TotalEnergies SE, with a price target of €66.00.

Christopher Kuplent has given his Buy rating due to a combination of factors that highlight both valuation upside and improving cash returns at TotalEnergies SE. He views the company as the most attractive name among the large integrated oil majors, noting that the shares are pricing in a very conservative long‑term oil price assumption of below $50 per barrel while peers effectively discount levels above $70. Against this cautious market expectation, his analysis still points to nearly 50% growth in free cash flow over the next two years, underpinned by a low corporate breakeven oil price of under $65 per barrel and a balance sheet that is steadily deleveraging. He also emphasizes that this setup provides scope for additional share buybacks and supports management’s guidance for cash returns that already look compelling at a long‑term oil price of $60 per barrel.

Christopher Kuplent’s rating is based on the conviction that TotalEnergies’ Integrated Power segment is transitioning from a drag on group free cash flow to a key contributor, enabling the company to increase shareholder distributions without relying on higher oil prices. He highlights that the recent fourth‑quarter 2025 trading update contrasted positively with peers, leading him to maintain estimates that now sit above market consensus for adjusted net income and suggest a reversal of recent forecast downgrades. In his view, the stock’s current price embeds an excessive discount to his detailed valuation, despite guidance that implies more than 8% total cash yield in the near term and a potential rise to roughly 14% by 2030. This combination of conservative market expectations, strong free cash flow growth, and rising, well‑covered cash returns underpins his decision to reiterate a Buy rating and maintain a €66 price objective.

Kuplent covers the Energy sector, focusing on stocks such as TotalEnergies SE, BP, and Shell (UK). According to TipRanks, Kuplent has an average return of -0.5% and a 56.79% success rate on recommended stocks.

In another report released today, UBS also maintained a Buy rating on the stock with a €61.00 price target.