Oddo BHF has reiterated its 'outperform' rating and its price target of 65 euros for TotalEnergies, following the group's announcement of acquiring a 50% stake in EPH's flexible power generation asset portfolio for 5.1 billion euros.
"At first glance, this acquisition is accretive (a 6% increase in free cash flow thanks to the joint venture's cash flow and reduced Capex, offset by a 4.1% dilution due to the share issuance)," the firm stated.
While Oddo BHF is maintaining its estimates for now, it emphasizes that the deal "de-risks" the energy group's objectives in the electricity sector and enhances its resilience against the risk of declining oil prices.
"In the longer term, it is entirely conceivable to carry out an IPO of iPower, which is currently undervalued, as a way to better realize its value," the analyst responsible for the report added.
