The CEO of French oil giant TotalEnergies has indicated the company is considering relocating its primary stock market listing to New York to potentially capitalize on the higher valuations enjoyed by its American counterparts.
In a recent interview with Bloomberg News, TotalEnergies Chairman and CEO Patrick Pouyanne said:
“We are facing a situation where European shareholders, either they sell or maintain, and U.S. shareholders are buying. So what is most convenient for U.S. shareholders? Do they prefer to have the shares being primarily listed in New York or in Europe? I think when you ask the question, you have the answer”.
This follows similar statements from Shell's CEO Wael Sawan regarding a potential move of its primary listing to the U.S.
FactSet data cited by MarketWatch reveals that European integrated oil companies typically hold lower valuations compared to their U.S. rivals.
However, analysts from Citi note that a move to the U.S. market does not guarantee an immediate valuation increase for TotalEnergies, suggesting that the company's current valuation discount might be related to its significant profits in refining.
In its latest Q1 report on Friday, TotalEnergies announced a 3% increase in first-quarter net income to €5.72 billion. Adjusting for factors such as the sale of parts of its retail network in Belgium, Luxembourg, and the Netherlands, profits dipped 22% to €5.11 billion. The company attributed the decline to decreasing gas prices and refining margins.
Production decreased by 2%, affected by the disposal of Canadian oil sands assets and natural field declines, despite new projects coming online in Brazil, Oman, Norway, and Azerbaijan.
TotalEnergies confirmed it would maintain its capital expenditure at between $17 billion and $18 billion and announced plans for $2 billion in stock buybacks for the second quarter.
RBC Capital Markets analysts noted that the results slightly exceeded market expectations — although production forecasts for the coming quarter were somewhat weaker than anticipated.
At the time of writing on Friday, April 26, TotalEnergies stock listed on Euronext Paris tradedup 1.18% at €68.86. The company’s Paris-listed stock has gained close to 12% so far this year.
The company’s American depositary receipts (ADRs) on the NYSE were up by 0.54% in premarket hours, trading around the $74.15 mark.
The TotalEnergies market cap last stood at €168 billion ($180 billion), as per MarketWatch data.
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