Overview#
Goldman Sachs has recently updated its price targets for several European oil and gas stocks. This adjustment comes in response to a significant rise in energy prices, which have been influenced by increasing geopolitical tensions in the Middle East.
Changes in Commodity Assumptions#
In a new research note, Goldman Sachs revised its projections for key commodities. Brent crude oil is currently trading close to $100 per barrel, while the European gas benchmark, TTF, is around €50 per megawatt-hour (MWh). The bank now predicts that Brent will average $85 per barrel in 2026 and $74 in 2027, up from previous estimates of $76 and $69, respectively. Additionally, the TTF gas price forecast has been raised to $15.6 per thousand cubic feet (mcf) in 2026 and $12.4 per mcf in 2027.
Impact on Earnings Expectations#
These optimistic price forecasts have led Goldman Sachs to increase its earnings expectations for the oil and gas sector. The bank anticipates that its earnings per share (EPS) estimates for European integrated oil companies and exploration & production (E&P) firms will rise by an average of 17% for 2026 and 11% for 2027. This places Goldman’s estimates significantly above the consensus forecasts from other analysts.
Individual Company Highlights#
Among the companies analyzed, BP stands out with a projected earnings forecast that is approximately 82% higher than consensus estimates for 2026. Despite the recent rise in oil prices, BP's stock has only seen modest increases since the escalation of the conflict in the Middle East. Goldman Sachs believes that sustained high oil prices could lead to profitability levels similar to those experienced during the 2022 energy crisis.
Price Target Revisions#
Reflecting the improved earnings outlook, Goldman Sachs has raised its 12-month price targets for several companies. For instance, the target for OMV has increased from €45 to €48, Equinor from NKr 240 to NKr 260, and TotalEnergies from €68 to €75. Other companies, including Repsol, ENI, Shell, and BP, also saw their price targets adjusted upward. However, analysts noted that they applied slightly lower valuation multiples in some cases to account for the heightened geopolitical risks and increased volatility in commodity prices.