TOTAL Shares Higher Following Bernstein Upgrade; Analyst Says Stock Is 'For All Seasons'

• Total SA (ADR) TOT shares are down 11 percent since November 16. Shares climbed 5 percent on February 12.
• Bernstein’s Oswald Clint upgraded the rating for the company from Market Perform to Outperform, with a price target of €51.
• Total’s current stock valuation offers a very attractive investment opportunity, Clint stated.

Total reported strong results, with little impact from the 2015 price collapse. The company has an emerging growth long life portfolio and its current stock valuation represents a “compelling entry point,” analyst Oswald Clint said.

Although Total’s results were not as impressive as that of Galp Energia SGPS SA, which recorded 70 percent EPS growth for 2015, they were the second best with balance sheet gearing declining 3 percent y/y.

“Amid the carnage out there, TOTALs tin hat remains unscathed with only a scrape due to the scrip dividend. That can be fixed as medium term FCF will ensure those shares are repurchased,” Clint wrote.

The analyst believes that investment in Total will mean benefiting from the company’s earnings resilience in the short term and benefits from higher oil prices over the medium term. Total’s upstream volumes, which declined from 2005 to 2014, grew 9.4 percent in 2015, driven by strong project execution. Clint expects the increase in production to continue till the end of this decade.

Investment in Total will provide exposure to long-life LNG assets with S-curve pricing protection, the Bernstein report.