Goldman Sachs has removed Repsol from its Buy List and cut the stock to Neutral after a steep rally that has left limited room for further gains, the bank said in a recent note.
The Spanish oil major's shares have climbed 27% since Feb. 27, the strongest advance among its European peers, which averaged an 18% rise over the same period. That outperformance, Goldman said, means Repsol now has roughly 3% of upside to its updated price target of c25.
The bank had kept Repsol on its Buy List since April 13, 2022. During that hold period the shares rose 78.7% versus a 33.2% increase for the FTSE World Europe index, prompting Goldman to re-evaluate the stock's positioning on an absolute and relative basis.
Rationale and estimates
Goldman reiterated support for Repsol's strategic direction, saying it still favors the company's margin-accretive growth strategy and attractive cash returns to shareholders. But reflecting the share price strength year-to-date, the bank said it is downgrading the stock to Neutral.
"We continue to like the company s margin accretive growth strategy and attractive cash return to shareholders, but take it off the Buy List, downgrading to Neutral, on the strong performance YTD," the analysts said.
The note included upward revisions to Repsol's forecasted earnings. Goldman raised its 2026 EPS estimate by 8% to c3.52 and the 2027 estimate by 4% to c2.83. Yet the bank noted the 2026 EPS sits only 28% above LSEG consensus, which is materially below the 47% group average, undercutting a stronger valuation argument.
Tax risk and regional sensitivity
Goldman also highlighted a political and fiscal risk that could affect returns. The brokerage pointed to Spain's 2022 imposition of a 1.2% levy on energy and banking sector turnover and warned elevated commodity prices could increase the odds of similar measures being reintroduced.
"Higher commodities prices could pose the risk for additional windfall taxes, as we saw in Spain in 2022, a material country for Repsol," the analysts added.
Sector-wide revisions
The downgrade for Repsol arrived as Goldman raised its oil price assumptions across European oils coverage. The bank lifted its 2026 Brent assumption to $88 per barrel from $85.1 and its 2027 forecast to $76.7 from $73.7, noting spot prices near $110.
Those adjustments increased sector-wide EPS estimates for 2026 and 2027 by 4% and 6% on average, respectively, and left Goldman s forecasts 48% and 26% above LSEG consensus for those years.
BP and coverage dynamics
Within Goldman Sachs' coverage, BP remained rated Buy and represented the largest positive divergence from consensus. Goldman is 75% above 2026 LSEG EPS consensus for BP even though the stock has risen only 16% since Feb. 27. The bank also raised BP's price target to 640 pence from 590 pence.
Repsol-specific exposures
Goldman noted that Repsol has zero upstream exposure to a potential Strait of Hormuz disruption, reporting the lowest Hormuz EBIT exposure in the European Big Oils group at 0%. At the same time, Repsol shows the highest refining margin sensitivity among its peers, with Goldman estimating a 4.6% cash flow impact per $1 per barrel change in refining margins. The bank identified that sensitivity as central to Repsol's recent outperformance driven by strength in middle distillates.
Goldman projected total shareholder returns for Repsol at 7% for 2026, rising to 8% in 2027, inclusive of dividends and buybacks.
Context on investment tools referenced in coverage
The original note included a separate product mention assessing BP alongside other companies using an AI-driven stock selection tool and referenced historical examples of winners identified by that tool. That content was presented separately from Goldman Sachs' analyst commentary on Repsol and sector estimates.