Repsol upgraded to Buy at Goldman on refining upside, undemanding valuation

Goldman Sachs upgraded Repsol to Buy from Neutral after the Spanish energy company reported first-quarter results that showed stronger refining performance and better cash generation.

The bank raised its 12-month target price to €25 from €24, according to reports of the note published on May 1. Goldman said it sees more upside from refining, an improving contribution from upstream operations and an undemanding valuation.

The upgrade follows Repsol's April 30 earnings release. The company said adjusted net income for the first quarter came in at €873 million. Reuters-reported coverage said profit rose nearly 57% year on year, helped by a sharp recovery in refining margins, particularly in March.

Repsol also said it allocated €1.2 billion in the quarter to increase inventories, underscoring the impact of volatile energy markets on results.

Goldman's move marks a change in tone from its earlier stance. Repsol's own analyst coverage page showed Goldman as Neutral with a €24 target in March.

For investors, the call puts the focus back on whether Repsol can sustain the refining strength that supported its first-quarter numbers and whether that keeps cash flow and earnings momentum intact in the quarters ahead.