Ecopetrol SA (EC) AI Stock Analysis

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Ecopetrol SA

(NYSE:EC)

Rating:76Outperform

Price Target:

$9.50

▲( 10.34% Upside)

Ecopetrol's strong valuation and robust financial performance are key strengths, with an attractive P/E ratio and high dividend yield providing solid investment potential. Despite technical indicators suggesting price stability, challenges in refining margins and tax disputes present risks. The company's strategic focus on energy transition and operational efficiency supports a positive outlook.

Positive Factors

Acquisition Potential

Ecopetrol is considering buying SierraCol Energy Ltd., which could boost its reserves and offer growth potential in the near term.

Valuation Upgrade

The analyst recommends upgrading Ecopetrol to Buy/High Risk due to considerable room for valuation rerating.

Negative Factors

Financial Challenges

Ecopetrol is dealing with higher lifting cost trends and lower cash generation compared to peers, which negatively affects its financial position.

Regulatory Risk

Ecopetrol is facing a US$2.2bn tax claim from Colombia’s tax authority, which adds significant uncertainty and risk to the company’s investment thesis.

Ecopetrol SA (EC) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$17.66B

Dividend Yield11.7%

Average Volume (3M)2.51M

Price to Earnings (P/E)5.2

Beta (1Y)0.35

Revenue Growth-2.26%

EPS Growth-20.04%

CountryUS

Employees18,903

SectorEnergy

Sector Strength42

IndustryOil & Gas Integrated

Share Statistics

EPS (TTM)0.36

Shares Outstanding2,055,834,700

10 Day Avg. Volume2,085,707

30 Day Avg. Volume2,507,567

Financial Highlights & Ratios

PEG Ratio-2.20

Price to Book (P/B)0.68

Price to Sales (P/S)0.00

P/FCF Ratio3.15

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$7.75

Price Target Upside-9.99% Downside

Rating ConsensusModerate Sell

Number of Analyst Covering2

Ecopetrol SA Business Overview & Revenue Model

Company DescriptionEcopetrol S.A. operates as an integrated energy company. The company operates through four segments: Exploration and Production; Transport and Logistics; Refining, Petrochemical and Biofuels; and Electric Power Transmission and Toll Roads Concessions. It engages in the exploration and production of oil and gas; transportation of crude oil, motor fuels, fuel oil, and other refined products, including diesel, jet, and biofuels; processing and refining crude oil; distribution of natural gas and LPG; sale of refined and petrochemical products; supplying of electric power transmission services; design, development, construction, operation, and maintenance of road and energy infrastructure projects; and supplying of information technology and telecommunications services. As of December 31, 2021, the company had approximately 9,127 kilometers of crude oil and multi-purpose pipelines. It also produces and commercializes polypropylene resins and compounds, and masterbatches; and offers industrial service sales to customers and specialized management services. It has operations in Colombia, the United States, Asia, Central America and the Caribbean, Europe, South America, and internationally. The company was formerly known as Empresa Colombiana de Petróleos and changed its name to Ecopetrol S.A. in June 2003. Ecopetrol S.A. was incorporated in 1948 and is based in Bogotá, Colombia.

How the Company Makes MoneyEcopetrol SA generates revenue through several key streams. Primarily, the company earns money from the exploration and production of crude oil and natural gas, which involves extracting these resources from its reserves and selling them on the global market. Additionally, Ecopetrol operates refining facilities that process crude oil into various petroleum products, such as gasoline, diesel, and other fuels, which are then sold domestically and internationally. The company also earns revenue through its transportation operations, which involve the pipeline transport of oil and gas across Colombia. Furthermore, Ecopetrol is involved in the production and sale of petrochemicals and biofuels, diversifying its revenue sources. Strategic partnerships and joint ventures with other energy companies also contribute to its earnings, enabling it to expand its operational capabilities and market reach.

Ecopetrol SA Key Performance Indicators (KPIs)

Any

EBITDA by Segment

EBITDA by Segment
Reveals profitability across different business units, highlighting which segments drive earnings and where operational efficiencies or challenges exist.

Chart InsightsEcopetrol's Midstream and Upstream segments show resilience with recent upticks, while Downstream faces volatility due to refining challenges and external price pressures. The earnings call highlights robust production and reserve additions, yet EBITDA is impacted by external factors and refining setbacks. Strategic investments in energy transition and sustainability are promising, but refining margin declines and operational disruptions pose risks. Investors should watch for continued progress in energy transition and efficiency gains as potential growth drivers.

Data provided by:

Main Street Data

Ecopetrol SA Financial Statement Overview

Summary

Ecopetrol SA demonstrates solid operational and cash flow metrics, highlighting operational efficiency and cash generation capabilities. Despite this, high leverage and fluctuating revenue growth present potential risks. Continued focus on managing profitability and leverage is crucial for future stability.

Income Statement

Positive

Ecopetrol SA shows a strong gross profit margin and consistent EBITDA margins reflecting operational efficiency. However, recent revenue growth has been volatile, indicating potential market challenges. Net profit margin has decreased significantly, highlighting pressure on profitability.

Balance Sheet

Positive

The company maintains a solid equity base with an adequate equity ratio, but the debt-to-equity ratio is relatively high, suggesting considerable leverage. Return on equity has been strong, but recent declines in net income could impact future returns.

Cash Flow

Very Positive

Ecopetrol SA's cash flow position is robust, with a substantial increase in operating cash flow. The free cash flow to net income ratio is favorable, indicating good conversion of income to cash. However, fluctuations in free cash flow growth indicate variability in capital expenditures.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
10.00T>	10.00T>	10.00T>	91.74T	50.03T
	Gross Profit
61.50T	55.92T	70.02T	36.16T	12.47T
	EBIT
37.59T	41.76T	60.38T	29.59T	7.63T
	EBITDA
52.79T	59.83T	71.12T	38.98T	17.36T
	Net Income Common Stockholders
14.94T	19.06T	31.60T	15.65T	3.37T
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
13.00T	14.20T	16.56T	16.18T	7.28T
	Total Assets
10.00T>	10.00T>	10.00T>	10.00T>	10.00T>
	Total Debt
10.00T>	10.00T>	10.00T>	95.06T	46.73T
	Net Debt
10.00T>	93.48T	99.73T	80.51T	41.65T
	Total Liabilities
10.00T>	10.00T>	10.00T>	10.00T>	83.60T
	Stockholders Equity
79.85T	75.71T	91.03T	71.73T	52.09T
Cash Flow		Free Cash Flow
24.20T	-4.29T	14.36T	9.24T	-1.93T
	Operating Cash Flow
45.13T	19.80T	36.23T	22.54T	9.19T
	Investing Cash Flow
-22.03T	-20.02T	-18.09T	-20.52T	-8.53T
	Financing Cash Flow
-22.69T	-354.61B	-18.93T	6.96T	-2.63T

Ecopetrol SA Technical Analysis

Technical Analysis Sentiment

Positive

Last Price8.61

Price Trends

50DMA

8.63

Negative

100DMA

8.51

Positive

200DMA

8.16

Positive

Market Momentum

MACD

0.02

Negative

RSI

54.60

Neutral

STOCH

56.41

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EC, the sentiment is Positive. The current price of 8.61 is above the 20-day moving average (MA) of 8.32, below the 50-day MA of 8.63, and above the 200-day MA of 8.16, indicating a neutral trend. The MACD of 0.02 indicates Negative momentum. The RSI at 54.60 is Neutral, neither overbought nor oversold. The STOCH value of 56.41 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for EC.

Ecopetrol SA Peers Comparison

Overall Rating

UnderperformOutperform

Sector (57)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EC	76 Outperform	$17.66B	5.19	18.64%	11.70%	-2.26%	-20.04%
YPF	76 Outperform	$14.54B	8.38	15.54%	―	8.58%	―
E	74 Outperform	$45.31B	16.60	4.78%	5.00%	-2.17%	-25.00%
EQNR	73 Outperform	$63.90B	7.40	18.28%	4.86%	3.96%	-1.69%
BP	69 Neutral	$74.78B	186.20	-1.87%	6.41%	-7.70%	-113.83%
PBR	68 Neutral	$72.60B	8.98	11.25%	15.55%	-10.84%	-61.73%
Sector *	57 Neutral	$7.06B	3.07	-3.45%	5.82%	0.59%	-50.58%

* Energy Sector Average

Performance Comparison

Ecopetrol SA

8.61

-1.49

-14.75%

29.09

-5.50

-15.90%

Eni SPA

29.10

-0.58

-1.95%

PBR

Petroleo Brasileiro SA- Petrobras

11.84

-1.03

-8.00%

EQNR

Equinor ASA

23.82

-2.27

-8.70%

YPF

YPF Sociedad Anonima

36.52

15.51

73.82%

Ecopetrol SA Earnings Call Summary

Earnings Call Date:May 06, 2025

(Q1-2025)

% Change Since: 9.26%|

Next Earnings Date:Aug 06, 2025

Earnings Call Sentiment Neutral

Ecopetrol demonstrated strong operational performance and progress in strategic energy initiatives, despite facing challenges such as a decrease in refining margin, tax disputes with DIAN, and the impact of lower Brent prices on financial results.

Q1-2025 Updates

Positive Updates

Strong Production Performance

Ecopetrol achieved a production of 745,000 barrels of oil equivalent per day, marking the highest crude oil production in Colombia in the last five years.

Significant Progress in Gas Initiatives

Ecopetrol signed a regasification services contract on Colombia's Pacific Coast with a project potential of 60 Giga BTUD, expected to begin operations in 2026.

Efficiency and Cost Management

The energy efficiency program generated savings of nearly COP 23 billion, with a total of 21 petajoules achieved since 2018.

ISA's Strong Contribution

ISA exhibited comprehensive growth with an increase of 9% in revenues and 8% in EBITDA year-over-year, contributing 13% of Ecopetrol's revenues and 18% of EBITDA.

Negative Updates

Decrease in Refining Margin

The refining margin decreased by $3.19 per barrel compared to the same period last year, primarily due to scheduled maintenances and operational events.

Challenges with DIAN's Tax Ruling

Ecopetrol faces a potential tax penalty and interest totaling COP 9.4 trillion related to VAT payments for the period 2022 to 2024.

Impact of Lower Brent Prices

Ecopetrol's financial results were impacted by declining Brent prices, affecting net income and requiring strategic financial adjustments.

Company Guidance

During Ecopetrol's earnings conference call for the first quarter of 2025, the company provided guidance amidst a backdrop of global uncertainty and volatile Brent prices. Ecopetrol reported an average production of 745,000 barrels of oil equivalent per day, aligning with annual goals despite local challenges. The refining margin decreased by $3.9 per barrel compared to the previous year, primarily due to product differentials and scheduled maintenance. The company highlighted significant progress in natural gas projects, including a regasification services contract on Colombia’s Pacific Coast, expected to begin operations in the second quarter of 2026, with a capacity of 60 giga BTUD. Additionally, Ecopetrol aims to achieve 900 megawatts of self-generation capacity in renewable energy. The financial report showed stability with an EBITDA of COP 13.3 trillion and a margin of 42%, despite lower Brent prices. The investment execution reached nearly 20%, with a focus on optimizing costs and reinforcing operational efficiency. The company remains committed to maintaining a strong financial position while navigating the energy transition and addressing challenges in the market.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.