RBC Upbeat on Repsol Amid Expectations of Robust FY26 Refining Margins

RBC Capital Markets noted its positive stance on Repsol (REP.MC) amid expectations of robust refining margins and an "attractive" 15% free cash flow yield in 2026, following a conference hosted by the research firm and investor meetings with the company's executives. "The war in Iran has resulted in significant disruption to the Middle East refining complex, which will lead to material inventory draw-downs in our view, thereby helping to support refining margins," analysts said Thursday. "We continue to like the risk-reward in owning Repsol given a tight oil products market is likely to support elevated refining margins through the rest of the year and into next year. Commitment to distributions and a stable financial framework is also an encouraging sign." The research firm also highlighted Repsol's upstream strategy, with plans to direct 80% of its upstream capital expenditure to US assets over the 2026 to 2028 period. The stock is rated outperform, with a price target of 32 euros.