Oil companies have delivered bumper results on both sides of the Atlantic. Yet the premium at which US companies trade compared with their peers in Europe has widened. The reason? European oils are stuck between a hydrocarbon and a hard place.
The peer group, which includes BP, Shell, Total, Repsol, Eni and Equinor, among others, now trades at 3.3 times forward cash flow according to analysis by Bernstein. Transatlantic oil groups are on more than twice that. In part, that is because the US market overall commands a higher multiple. That was one reason why Shell considered listing in the US. Even so, valuations have diverged sharply over the past year.
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