Morgan Stanley shuffles EU energy ratings with three upgrades, two downgrades

Morgan Stanley analysts Martijn Rats and Guilherme Levy see the path to a return to pre-conflict oil prices “narrowing” and raised their 2027 Brent price estimate to $80 per barrel. Incorporating this and other recent commodity estimates, as well as disruption effects, the firm raised its 2026 EPS estimates for the European Energy Majors by about 100% and 2027 estimates by roughly 50%, while upgrading its sector view to Attractive. The firm also re-shuffled its order of preference towards higher-beta names, upgrading BP (BP) to Overweight from Equal Weight with a price target of $49.40, up from $36.20; upgrading Repsol (REPYY) to Overweight from Equal Weight with a price target of EUR 28, up from EUR 20; and upgrading Equinor (EQNR) to Equal Weight from Underweight with a price target of $40.40, up from $22.80. Meanwhile, the firm downgraded Shell (SHEL) to Equal Weight from Overweight with a price target of $95.50, up from $80.20; and downgraded Galp Energia (GLPEY) to Equal Weight from Overweight with a price target of EUR 24, up from EUR 21. Additionally, TotalEnergies (TTE) was reiterated at Overweight and as a Top Pick with a price target of $102.50, up from $78.