Analysts at JPMorgan repeated a cautious stance on European oil and gas equities into 4Q reporting season, with the American bank highlighting a more challenging 2026 backdrop as oversupply risks are seen as building.
The bank also flagged valuation and expectations. It said an 8.1% 2026e free cash flow yield at the forward strip Brent is “rich” versus the long-term average. It added that consensus EPS expectations “appear full”.
For 4Q, JPMorgan expects a mixed set of updates. It pointed to “chequered refining margin capture”, seasonal pressure from costs and marketing, and “downward pressure on share buybacks”. The broker said it expects “a mixed Shell trading statement to prove indicative of broader sector trends”.
Even so, JPMorgan argued geopolitics could dominate near-term trading. It said “conflicting geopolitical risks (Iran, Venezuela) are significant to oil and could well continue to override the reporting season as the sector’s key near-term driver.”
JPMorgan set out tactical pair trades to isolate relative performance. Its calls include an overweight rating for Shell PLC (LSE:SHEL, NYSE:SHEL) and Repsol, whilst other European names like Equinor and ENI were rated 'underweight', and France's TotalEnergies is pegged at 'Neutral'.