麦格理-全球-石油与天然气行业-全球整装石油与炼油：第二季度盈利继续呈现负增长势头-2019.7.5-44页 (2).pdf

Please refer to page 42 for important disclosures and analyst certification,or on our website July 2019 Global EQUITIES Source:Bloomberg,Macquarie Research,July 2019,prices as of 3 July 2019 Inside Negative earnings momentum continues 2Q 2 Macro outlook 5 Sector valuation 13 Company views and financials 16 Total(FP FP)16 Royal Dutch Shell(RDSA LN)18 BP(BP LN)20 Exxon(XOM US)22 Chevron(CVX US)24 OMV(OMV AV)26 Repsol(REM SM)28 Galp(GALP PL)30 Equinor(EQNR NO)32 Eni(ENI IM)34 Petrobras(PBR US)36 Neste(NES1V FH)38 Saras(SRS IM)40 Analysts Macquarie Capital(Europe)Limited Giacomo Romeo,CFA +44 20 3037 4445 David Hewitt +44 20 3037 5492 Naisheng Cui +44 203 037 4062 James Carmichael,CFA +44 20 3037 4282 Global Integrated Oil and Refining Negative earnings momentum continues 2Q Key points We are forecasting an EPS decline of 9%Y/Y(+16%Q/Q)for the global integrated sector in 2Q19.We expect FCF to decline by 12%(-5%QoQ)Key driver for the sequential changes was a$6/bbl increase in the Brent oil price,partially offset by weaker gas prices.Downstream macro was mixed For 2Q,on average we are 5%behind EPS Bloomberg consensus We see 2Q as the 2nd consecutive quarter of falling sector EPS(YoY)1Q19 was the first quarter since 2016 that showed negative Y/Y earnings momentum(-16%on average).We expect this trend to extend into 2Q,for which we expect a 9%earnings decline Y/Y.However,relative to last quarter we expect to see a 16%recovery driven by higher oil prices(Brent+10%Q/Q),higher upstream volumes(+1%Q/Q;+5%Y/Y)and better global refining margins(more mixed in Europe),partially offset by weaker gas prices(NBP-6%;HH-12%;Asia spot LNG-28%Q/Q).We expect FCF generation(ex-WC)for the sector to fall by 13%on average Y/Y and by 5%Q/Q(to US$24.1bn).In aggregate,we see limited downgrades for consensus in 2Q The quarterly ball will be opened by Repsol on Jul 24th and closed by CVX and XOM on Aug 2nd.In aggregate,our estimates are 5%lower than consensus,although we believe estimates have not yet been marked to market.We also see some large EPS variances on specific names:XOM(-24%below consensus),REP(19%below),PBR(8%below),and EQNR(8%below).Among the refiners,we see downside to consensus numbers for Neste,due to rising Renewable products feedstock prices(reporting on July 25th).Sector valuation is attractive,compared to historical levels The second quarter was defined by highly volatile oil prices from$70/bbl+to below$60/bbl and then back to$65/bbl.The integrateds sector share prices fell similarly(European sector losing 12%and then recovering 7%).Even after the partial recovery,we continue to consider the sector as cheap:weighted average PE(1-year forward based on FactSet consensus)is currently at 12.8x,6%below the 20-year average of 13.5x(when most of the underlying equity markets are trading at a premium vs.historic average).At the same time,weighted average dividend yield is at 4.9%,one of the highest levels seen in the last 20 years.TOT remains our top pick among the supermajors.OMV among the mid cap integrateds.We prefer XOM over CVX.Total remains our top pick among the supermajors,offering leading production growth at an attractive valuation.Among the US names we prefer XOM over CVX due to the multiple growth opportunities offered by its upstream portfolio,especially when compared against CVXs focus on short-cycle upstream growth.Among the mid cap majors,our top picks are OMV and GALP,both offering a high dividend growth potential.Our other Outperforms are RDS and REP.Among the refiners,Saras is our preferred IMO pick,while we have an Underperform recommendation on Neste due to the valuation assigned by the market to their Renewable Products business,which we consider excessive.TickerPriceRec.Target PriceEPS(2019)(local)OldNewOldNewDelta Ups.OldNewDeltaBP/LN546pNN580p580p0%6%0.610.56-8%RDSA LN2579pOPOP2800p2800p0%9%2.832.73-3%RDSB LN2581pOPOP2800p2800p0%9%2.832.73-3%FP FP49.1OPOP67.067.00%36%5.975.53-7%ENI IM14.6NN16.416.40%13%1.341.28-5%EQNR NOkr170NNkr207kr2070%22%1.971.54-22%XOM US$76OPOP$86$860%13%4.103.13-24%CVX US$123NN$119$1190%-4%7.957.33-8%PETR3 BZR$30NNR$30.4R$30.40%2%2.362.381%REP SM13.8OPOP17.917.90%30%1.831.74-5%OMV AV43.2OPOP60.060.00%39%5.804.35-25%GALP PL13.3OPOP16.616.60%25%0.940.88-6%Avg.0%-10%Saras1.3OPOP2.22.20%65%0.130.10-24%Neste30.4UPUP28.028.00%-8%1.691.733%Macquarie Research Global Integrated Oil and Refining 5 July 2019 2 Negative earnings momentum continues 2Q Even after the recent share price recovery,sector valuation remains attractive The integrated sector is up 10%YTD but less than 4%over the last 12 months,while Brent is up 26%YTD and down 16%over the last 12 months.YTD,PBR,CVX,XOM and RDS have been the best performers,all enjoying a share price appreciation of over 10%.EQNR and GALP have been the worst performers,the first one impacted by falling gas prices,the second one by the weak refining environment.Petrobras strong share price performance was driven by its new management executing on the divestment front and the positive developments on the transfer or rights price adjustment negotiations with the government.Fig 1 Stock US$Performance 2019 YTD Fig 2 Stock US$Performance last 12 months Source:FactSet,Macquarie Research,July 2019 Source:FactSet,Macquarie Research,July 2019 Even after the recent share price recovery,the sector valuation continues to look attractive when we compare PE and dividend yield against historical levels and key stock market indexes.The PE multiple of the global oil integrated sector has more than halved since its peak in 1Q16(28.3x)and is currently at 12.8x(on a next twelve months basis),equivalent to a 5%discount to the 20-year average level(13.5x).We see this level of valuation discount as attractive,especially when considered in the context of the sector dividend yields.Based on FactSet NTM consensus,the Global Integrated sector is currently trading at an average 4.9%yield,compared to an historical level of 3.9%.Fig 3 Forward Sector PER versus Global Indices Fig 4 Forward Sector dividend yield versus Global Indices Source:Company data,Macquarie Research,FactSet,July 2019 Source:Company data,Macquarie Research,FactSet,July 2019-10%-5%0%5%10%15%20%25%30%EQNRGalpREPENITOTBPSectorRDSOMVXOMCVXPBRBrent Oil-30%-20%-10%0%10%20%30%40%50%60%EQNRGalpREPBrent OilENIOMVBPTOTXOMRDSSectorCVXPBR16.8x15.0 x14.0 x12.6x12.8x15.8x14.4x13.8x13.1x13.5x7%4%1%-4%-5%-10%-6%-2%2%6%10%0 x2x4x6x8x10 x12x14x16x18xS&P 500WorldEurostoxx 50FTSE 100GlobalintegratedsLatest PE20-yr average PEPremium vs.20-yr average4.9%4.7%4.0%2.7%2.0%3.9%3.9%3.7%2.6%2.0%26%19%7%4%0%-10%0%10%20%30%40%50%0%1%2%3%4%5%6%GlobalintegratedsFTSE 100Eurostoxx 50WorldS&P 500Latest DY20-yr average DYPremium vs.20-yr average(RHS)Macquarie Research Global Integrated Oil and Refining 5 July 2019 3 Earnings momentum In 2Q 2019,we expect year-on-year earnings for the integrateds follow the 1Q trend and continue to fall after eight consecutive quarters of annual growth in 2017-18.This is a reflection of a worsening macro environment(Brent-8%YoY,WTI-12%,NBP-43%,JKM-31%,refining and petchem margin weakness).Last quarter,sector earnings were in line with our expectations on average.For this quarter,we expect aggregate sector earnings of US$24bn.Fig 5 Integrateds Earnings and Oil Price Momentum,2011-19E Source:Company data,Macquarie Research,FactSet,July 2019 From a divisional perspective,we expect upstream earnings to decline 3%YoY and increase 9%QoQ,recovering from a weak 1Q.In downstream(which includes petrochemicals)we forecast earnings also to decrease 13%YoY and increase 16%QoQ.We expect upstream production to grow 5%YoY and 1%QoQ.Fig 6 Global integrated sector divisional earnings split Source:Company data,Macquarie Research,FactSet,July 2019 All of the companies in our coverage have not yet released their consensus numbers;however,relative to the external consensus providers(Visible Alpha/Bloomberg),our 2Q EPS estimates are on average 5%lower.-100%-50%0%50%100%150%200%250%1Q112Q113Q114Q111Q122Q123Q124Q121Q132Q133Q134Q131Q142Q143Q144Q141Q152Q153Q154Q151Q162Q163Q164Q161Q172Q173Q174Q171Q182Q183Q184Q181Q192Q19EYoY US$earnings/oil price changeEarnings momentumOil price momentum020406080100120140-20-10010203040501Q112Q113Q114Q111Q122Q123Q124Q121Q132Q133Q134Q131Q142Q143Q144Q141Q152Q153Q154Q151Q162Q163Q164Q161Q172Q173Q174Q171Q182Q183Q184Q181Q192Q19E($/bbl/$/T)($bn)E&PR&MOthersTotal net incomeBrent oilGlobal complex ref.margin($/T)Macquarie Research Global Integrated Oil and Refining 5 July 2019 4 Fig 7 Integrateds 2Q FCF pre-working capital generation should fall slightly QoQ Source:Company data,Macquarie Research,FactSet,July 2019 Fig 8 Integrated Earnings Estimates,2Q19E Source:Company data,Macquarie Research,FactSet,July 2019 Earnings changes decreasing 2019-21E by an average of 6%In the table below we illustrates the EPS changes we made for the 2019-21E period.On average,we are decreasing our 2019E EPS estimates by 10%on the back of a more conservative FY19 outlook for both gas prices and refining margins(more details on the macro context in the next section).We make material downgrades to our EQNR and OMV 2019E estimates,driven by lower gas prices in Europe.Saras earnings are affected by a more conservative near-term refining margin environment as well as the companys latest volumetric guidance.Fig 9 Earnings changes,2019-21E 2019E 2020E 2021E BP-8%-7%-6%RDS-3%-8%-11%TOT-7%-6%-10%XOM-24%-9%-12%CVX-8%1%1%EQNR-22%3%4%ENI-5%1%0%OMV-25%3%4%GALP-6%-2%-4%REP-5%-4%-8%PBR 1%0%0%Integrateds sector average-10%-3%-4%Saras-24%-13%-24%Neste 3%0%-3%Source:Company data,Macquarie Research,July 2019 CompanyCurrencyFCF(Organic)2Q18AFCF(Organic)1Q19AFCF(Organic)2Q19Eq/q changey/y changeBPUS$2,2483,2732,414-26%7%RD ShellUS$6,0936,5064,033-38%-34%TotalUS$3,3033,0123,71923%13%EniUS$8161,6441,6742%105%XOMUS$3,6481,7781,732-3%-53%CVXUS$4,7614,5004,6293%-3%EquinorUS$5281,8861,027-46%95%PetrobrasUS$5,7207103,593406%-37%GALPUS$52317724840%-53%RepsolUS$7461,105576-48%-23%OMVUS$-1,032770485-37%+/-Sector/Avg.27,35425,36124,131-5%-12%Supermajors20,05319,06916,528-13%-18%CompanyCurrencyEPS estimateYoY$EPS growthConsensusMACQ rel cons.ReportingConsensus SourceBPUS$0.14101%0.14-1%30-JulBloombergRD ShellUS$0.6645%0.66-1%01-AugVisible AlphaTotalUS$1.3553%1.331%25-JulBloombergXOMUS$0.6648%0.88-24%02-AugBloombergCVXUS$1.82194%1.90-4%02-AugBloombergEniEur0.30497%0.292%26-JulBloombergEquinorUS$0.38226%0.41-8%25-JulBloombergPetrobrasR$0.65914%0.71-8%25-JulBloombergGALPEur0.2125%0.210%29-JulBloombergRepsolEur0.327%0.39-19%24-JulBloombergOMVEur1.09-3%1.15-5%31-JulBloombergAverage86%-5%Supermajors69%-5%Macquarie Research Global Integrated Oil and Refining 5 July 2019 5 Macro outlook Crude oil market Reasonably volatile quarter:US$13/bbl peak to trough,quarter ended virtually at the same price it started In 2Q 2019,the quarter started at US$68/bbl(all prices are Brent)and peaked later in that month at US$72/bbl before demand concerns,primarily linked to tariff concerns,led to a correction from the middle of May to the low point for the quarter of US$59/bbl in the middle of June.In the final two weeks of the quarter,significantly escalating Middle East geopolitical concerns lifted the price again,which stood at US$66/bbl at the end of the quarter.Fig 10 High Brent oil price volatility in 2Q Source:FactSet,Macquarie Research,July 2019 Supply:growth,decline and restraintsoft demand story On the supply side,Iranian exports moved down from 1.3mmb/d in March through 1mmb/d in April to just 226kb/d in May(crude)and condensate exports have declined from 420kb/d in March to zero by May.Production in Venezuela continued to decline in the quarter.In the US,the second quarter likely added 300kb/d.In OPEC,Saudi was producing materially below its 10.3mmb/d agreed ceiling.On the demand side,both weather-related weakness along with slowing economic stimulus given the US/China trade dispute imply 1H YoY growth of less than 1mmb/d,with slowing industrial production challenging diesel growth and pump prices impacting gasoline growth.Without a US/China or broader trade deal,a sub 1.0mmb/d of growth scenario is within reason and US/global PMIs could fall below 50.For more granularity,please see our Houston-based macro teams report here.Fig 11 Iranian exports decreased dramatically due to US sanctions Source:Petro-Logistics,IEA,Macquarie Capital(USA),June 2019 5560657075801-Apr8-Apr 15-Apr 22-Apr 29-Apr 6-May 13-May20-May27-May 3-Jun 10-Jun 17-Jun 24-Jun(US$/bbl)-400 800 1,200 1,600 2,000Aug-18Sep-18Oct-18Nov-18Dec-18Jan-19Feb-19Mar-19Apr-19May-19(kb/d)CrudeCondensateMacquarie Research Global Integrated Oil and Refining 5 July 2019 6 And into 3Q we go:ROPEC stay united,tariff resolution important will we see the greenshoots of IMO refining strength?2Q saw an elevated turnaround season for global refiners,being higher than 2018,2017 and the 2013-2016 range.We strongly suspect that this was partially in preparation for the IMO regulation implementation at the start of calendar 2020 and could partly explain why the typical turn in US crude inventories was delayed by several weeks.Clearly the lack of resolution to the US/China tariff will continue to challenge the demand story(and vice versa:we remain structural demand bulls ex the tariff issue).On the supply side,the recent OPEC+meeting in Vienna re-confirmed cohesion for OPEC and its wider friends,with multiple OPEC speakers mentioning the additional time required to restore oil market balance.Saudi Oil Minister Al Falih recently commented that he would like to target an OECD inventory balance equivalent to the 2010-2014 average,rather than the most recent five-year average,a significantly lower figure.We expect the US to again record growth north of 300kb/d in the third quarter.Our Brent forecast for 3Q 2019 is US$68/bbl(and US$60/bbl for WTI).Fig 12 US Weekly Change in Crude Inventories Source:US EIA,Macquarie Research,July 2019 -14-11-8-5-2147101313579 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51(mmb)(Number of weeks)US Weekly Change in Crude InventoriesCrude Oil5-Yr AverageMacquarie Research Global Integrated Oil and Refining 5 July 2019 7 Global gas US,European and Asian spot LNG prices all fell materially in 2Q In the US Henry Hub fell through the quarter,from its opening price of US$2.71/mmbtu to a low of US$2.19/mmbtu on the 20th June,closing the quarter at US$2.31/mmbtu.In Europe TTF opened the quarter at US$4.56/mmbtu and briefly rose until the 9th April(US$5.48/mmbtu)before,as with HH,it declined for the remainder of the quarter,ending at US$3.11/mmbtu.In Asia North Asia spot prices very closely followed the European hub prices,opening the quarter at US$4.38/mmbtu,falling to a low of US$4.24/mmbtu and closing at US$4.50/mmbtu.Fig 13 Henry Hub,TTF&North Asia spot prices 2Q 2019 Source:Argus Media,FactSet,Macquarie Research,July 2019 Loose LNG conditions this year and next:Our global LNG model suggests an excess in 2019 of 8mt