Ecopetrol SA (EC) AI Stock Analysis

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Ecopetrol SA

(NYSE:EC)

Rating:73Outperform

Price Target:

$10.00

▲(12.36% Upside)

Ecopetrol's overall stock score reflects strong valuation metrics, particularly its attractive P/E ratio and high dividend yield, which are significant positives. Financial performance is stable but challenged by high leverage and declining free cash flow. Technical analysis suggests a lack of strong momentum, and mixed earnings call sentiment highlights operational achievements but also financial pressures from external market conditions.

Positive Factors

Acquisition and Expansion

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

Financial Performance

Upstream performance was stronger than expected, with an EBITDA of COP5.9tn, which is 9% higher than expectations.

Valuation

A reduction in the WACC assumption from 12% to 10% and the expectation of new oil exploration bidding rounds in Colombia contribute to an improved valuation model.

Negative Factors

Legal and Tax Issues

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.

Operational Challenges

Ecopetrol has struggled in recent years to replenish reserves and increase production, relying on high-risk exploratory projects.

Political and Fiscal Environment

Colombia’s government has been facing rising public spending demands while aiming to reduce the fiscal deficit, contributing to a very complicated fiscal backdrop.

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

Market Cap

$18.41B

Dividend Yield20.06%

Average Volume (3M)2.17M

Price to Earnings (P/E)6.2

Beta (1Y)0.28

Revenue Growth-7.51%

EPS Growth-29.04%

CountryUS

Employees18,903

SectorEnergy

Sector Strength49

IndustryOil & Gas Integrated

Share Statistics

EPS (TTM)0.24

Shares Outstanding2,055,834,700

10 Day Avg. Volume2,291,278

30 Day Avg. Volume2,165,687

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)N/A

P/FCF RatioN/A

Enterprise Value/Market Cap2.80

Enterprise Value/Revenue<0.01

Enterprise Value/Gross Profit<0.01

Enterprise Value/Ebitda<0.01

Forecast

1Y Price Target

$8.68

Price Target Upside-2.47% Downside

Rating ConsensusHold

Number of Analyst Covering4

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 generates revenue primarily through the sale of crude oil and natural gas, which are its core products. The company leverages its extensive network of production and refining facilities to convert raw hydrocarbons into various petroleum products, which are then sold in both domestic and international markets. Key revenue streams include the sale of refined products like gasoline, diesel, and aviation fuel, along with natural gas sales to industrial and residential customers. Additionally, Ecopetrol benefits from transportation fees charged for the use of its pipelines and infrastructure. The company has established significant partnerships with international oil companies, which enhance its exploration capabilities and technological advancements. Fluctuations in global oil prices, regulatory changes, and investment in renewable energy projects also play a critical role in shaping its financial performance.

Ecopetrol SA Key Performance Indicators (KPIs)

Any

EBITDA by Segment

EBITDA by Segment
Highlights earnings before interest, taxes, depreciation, and amortization for each business segment, providing insight into the profitability and operational efficiency of different areas within the company.

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 Earnings Call Summary

Earnings Call Date:Aug 12, 2025

(Q2-2025)

% Change Since: 4.34%|

Next Earnings Date:Nov 11, 2025

Earnings Call Sentiment Neutral

Ecopetrol's earnings call highlighted significant operational achievements in production, renewable energy expansion, and gas commercialization. However, these were offset by the negative impact of declining crude prices, midstream volumetric challenges, and financial adjustments affecting ISA. The sentiment is mixed, with strong operational progress but financial pressures due to external market conditions.

Q2-2025 Updates

Positive Updates

Record Semester Production

Achieved a semester production of 751,000 barrels of oil equivalent per day, the highest level in a decade, driven by strong performance in Colombia and the Permian Basin in the United States.

Commercial Viability of Lorito Discovery

Declared the commercial viability of the Lorito discovery in Meta, the most significant in the past 10 years, with approximately 250 million barrels of oil in recoverable resources.

Expansion of Renewable Energy Portfolio

Expected to exceed the goal of 900 megawatts in renewable energy by 2025, with significant acquisitions made during the quarter.

Gas Segment Achievements

Completed the first long-term commercialization of natural gas in Colombia, securing national supply through 5-year contracts.

Downstream Segment Recovery

Achieved a 53% increase in EBITDA compared to the same period in 2024, supported by improved operational availability and throughput.

Negative Updates

Impact of Declining Crude Prices

Brent crude price fell by 22% compared to the second quarter of 2024, significantly impacting revenue and profits.

Midstream Volumetric Decline

Transported volumes decreased by 6% compared to the second quarter of 2024 due to external events such as blockades and theft.

Operational Challenges in Refining

Refining throughput decreased by 5% compared to the first half of 2024 due to increased maintenance activities and external events.

ISA Financial Impact

Adjustments to the financial components of assets in Brazil resulted in a reduction in EBITDA of approximately COP 0.6 trillion.

Net Income Decline

Recorded a net income of COP 4.9 trillion, representing a year-over-year decline of COP 2.5 trillion, mainly due to external market factors.

Company Guidance

During the second quarter of 2025, Ecopetrol provided guidance on various operational and financial metrics. The company achieved a production level of 751,000 barrels of oil equivalent per day, marking the highest output in a decade. This increase was attributed to strong performances in Colombian fields such as Caño Sur and CPO-09, and the Permian Basin in the United States. Ecopetrol also declared the commercial viability of the Lorito discovery in Meta, Colombia, and began drilling the Papayuela well in the Caribbean offshore to enhance the country's gas potential. The midstream segment handled over 1 million barrels per day, supported by operational solutions to mitigate external disruptions. The Pozos Colorados terminal expansion was completed, including the country's largest tank with a capacity of 320,000 barrels. In the downstream segment, throughput reached 405,000 barrels per day, demonstrating full operational recovery post-maintenance, and the company expects improved margins in the latter half of the year. Ecopetrol completed the first long-term commercialization of significant natural gas in Colombia, securing national supply through five-year contracts. The company also signed an agreement to acquire Windpeshi, its first wind project, to advance decarbonization and reduce operational energy costs. Despite a 22% decline in Brent crude prices compared to the previous year, Ecopetrol achieved efficiencies totaling COP 2.2 trillion, surpassing the semester's target by 27%. The company's investment commitments amounted to USD 2.5 billion this year, aligned with its long-term strategy, and it maintained its production target for 2025. Ecopetrol completed full dividend payments to shareholders, delivering a 10% return, and made 80% progress in its optimization plan to reduce costs and expenses.

Ecopetrol SA Financial Statement Overview

Summary

Ecopetrol SA demonstrates solid operational and cash flow metrics, highlighting operational efficiency and cash generation capabilities. However, 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.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	10.00T>	10.00T>	10.00T>	10.00T>	91.74T	50.03T
Gross Profit	45.71T	61.49T	55.92T	70.02T	36.16T	12.47T
EBITDA	45.10T	52.79T	59.83T	71.12T	38.98T	17.36T
Net Income	12.49T	14.94T	19.06T	31.60T	15.65T	3.37T
Balance Sheet
Total Assets	10.00T>	10.00T>	10.00T>	10.00T>	10.00T>	10.00T>
Cash, Cash Equivalents and Short-Term Investments	14.34T	14.91T	14.20T	16.56T	16.18T	7.28T
Total Debt	10.00T>	10.00T>	10.00T>	10.00T>	95.06T	46.73T
Total Liabilities	10.00T>	10.00T>	10.00T>	10.00T>	10.00T>	84.19T
Stockholders Equity	79.22T	83.70T	78.39T	91.03T	68.49T	49.90T
Cash Flow
Free Cash Flow	15.75T	24.20T	-4.29T	14.36T	9.24T	-1.93T
Operating Cash Flow	38.21T	45.13T	19.80T	36.23T	22.54T	9.19T
Investing Cash Flow	-25.05T	-22.03T	-20.02T	-18.09T	-20.52T	-8.53T
Financing Cash Flow	-16.83T	-22.69T	-354.61B	-18.93T	6.96T	-2.63T

Ecopetrol SA Technical Analysis

Technical Analysis Sentiment

Positive

Last Price8.90

Price Trends

50DMA

8.93

Negative

100DMA

8.72

Positive

200DMA

8.35

Positive

Market Momentum

MACD

0.02

Negative

RSI

56.82

Neutral

STOCH

76.96

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 8.9 is above the 20-day moving average (MA) of 8.63, below the 50-day MA of 8.93, and above the 200-day MA of 8.35, indicating a neutral trend. The MACD of 0.02 indicates Negative momentum. The RSI at 56.82 is Neutral, neither overbought nor oversold. The STOCH value of 76.96 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 (65)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
E	78 Outperform	$53.17B	20.01	4.83%	6.74%	-6.31%	-33.87%
EC	73 Outperform	$18.41B	6.17	15.94%	20.06%	-7.51%	-29.04%
EQNR	72 Outperform	$61.07B	7.88	19.22%	8.78%	1.19%	-7.87%
YPF	72 Outperform	$12.64B	10.07	10.88%	―	4.28%	―
PBR	66 Neutral	$73.19B	5.58	19.48%	14.92%	-13.68%	-13.96%
BP	65 Neutral	$87.55B	143.31	0.95%	5.68%	-7.40%	-90.89%
Sector *	65 Neutral	$14.81B	7.14	3.01%	5.53%	4.29%	-62.49%

* Energy Sector Average

Performance Comparison

Ecopetrol SA

8.90

-0.31

-3.37%

34.05

1.92

5.98%

Eni SPA

35.45

4.30

13.80%

PBR

Petroleo Brasileiro SA- Petrobras

11.95

-0.88

-6.86%

EQNR

Equinor ASA

24.97

-0.18

-0.72%

YPF

YPF Sociedad Anonima

31.67

10.60

50.31%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Aug 20, 2025