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1. Company Snapshot

1.a. Company Description

Galp Energia, SGPS, S.A. operates as an integrated energy operator in Portugal and internationally.The company operates through four segments: Upstream, Industrial & Energy Management, Commercial, and Renewables and New Business.The Upstream segment engages in the exploration, development, and production of hydrocarbons primarily in Brazil, Mozambique, and Angola.


The Industrial & Energy Management segment owns refineries in Portugal, as well as is involved in activities related to energy management of oil products, gas, and electricity.This segment also provides storage and transportation infrastructure for oil and gas products, as well as engages in the sale of electricity to the grid in Portugal and Spain.The Commercial segment is involved in the areas of retail to final business-to-business and business to consumer customers of oil, gas, and electricity.


The Renewables and New Business segment is involved in the development of solar and wind power generation projects in Portugal and Spain.In addition, it produces biodiesel, biofuel, and green hydrogen; and operates 1,480 service stations and 1,186 electric mobility charging points.Further, the company engages in the reinsurance business.


The company was formerly known as Galp – Petróleos e Gás de Portugal, SGPS, S.A. and changed its name to Galp Energia, SGPS, S.A. in September 2000.Galp Energia, SGPS, S.A. was incorporated in 1999 and is headquartered in Lisbon, Portugal.

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1.b. Last Insights on GALP

Galp Energia's recent performance was driven by strong 2025 earnings, with net income rising despite lower sales and revenue. The company's robust cash flow and advancements in low-carbon projects also contributed positively. A share buyback announcement further boosted investor sentiment. Operational performance was mixed, with solid upstream production but a sharp decline in refining volumes. JPMorgan's upgraded stance on European oil majors, including a potential 17% upside, has also supported the stock.

1.c. Company Highlights

2. Galp's 2025 Earnings: A Strong Operational Performance

Galp's financial performance in 2025 was marked by a strong operational delivery, although the EPS came in lower than expected at €0.2273 compared to analyst estimates of €0.3278. Despite the EPS miss, the company's revenue growth is expected to continue, with analysts estimating a 5.2% growth in revenues for the next year. The company's operational performance was highlighted by its Brazil production reaching 111,000 barrels per day and the Bacalhau project achieving first oil with high productivities. As Maria Joao Carioca noted, "Galp's operations are Atlantic-centered, and they are monitoring the geopolitical situation, taking actions to reroute equity oil shipments."

Publication Date: Mar -03

📋 Highlights
  • 2025 Operational Performance: Brazil production reached 111,000 barrels per day, with Bacalhau achieving first oil at high productivity.
  • 2026 Guidance: Production target of 125,000–130,000 barrels/day (15% increase), EUR 1 billion organic CapEx, and EUR 0.64/share dividend with EUR 250M buyback.
  • Mopane FPSO Target: Aiming for a 200,000-barrel-per-day FPSO, with development refining and drilling plans to maximize value.
  • Moeve Transaction Synergies: Expected 10% combined synergies from the transaction, with a preliminary agreement anticipated by mid-2026.
  • Low-Carbon Projects: 35% of 2026 CapEx allocated to low-carbon initiatives, including 60–65% committed for Sines green hydrogen and 15 TW LNG deliveries.

Operational Highlights

The company's operational performance was driven by its upstream assets, with production expected to increase by 15% to 125,000-130,000 barrels per day in 2026, driven by the ramp-up of the Bacalhau project. The company's refining margins are currently in double digits, and they expect to maintain a strong commercial performance. Galp is also making progress on its low-carbon projects, with 60-65% of CapEx already committed to the green hydrogen project in Sines.

Valuation and Returns

Galp's valuation metrics indicate a reasonable pricing, with a P/E Ratio of 14.79 and a P/B Ratio of 3.29. The company's EV/EBITDA ratio is 5.84, indicating a relatively low valuation compared to its earnings. The company's Return on Equity (ROE) is 21.47%, indicating a strong return on shareholders' equity. The dividend yield is 3.33%, providing a relatively attractive income stream for investors.

Growth Prospects

Galp's growth prospects are driven by its upstream projects, including the Bacalhau and Mopane developments. The company is also exploring opportunities in Namibia, where they retain 40% of the asset and are working with Total to develop it. The company's focus on the Atlantic Basin is expected to drive growth, with a partner providing a solid backing into the geography. Galp's inorganic CapEx is expected to be around €500 million, with a focus on upstream deals, although they may consider diversifying into gas in the future.

Dividend and Share Buyback

Galp maintains its distribution guidelines intact for 2026, with a €0.64 dividend per share and a €250 million share buyback to be executed throughout the year. This indicates a commitment to returning value to shareholders, while also investing in growth opportunities.

3. NewsRoom

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Has Galp Energia (GLPEY) Outpaced Other Oils-Energy Stocks This Year?

Apr -14

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Equinor Eyes Higher Production in 2026 With Strong NCS Portfolio

Apr -02

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Sintana Energy flags major resource upgrade at Namibia oil discovery

Mar -30

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Venture Global Expands LNG Portfolio, Signs New Agreement With Vitol

Mar -24

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A Look At Galp Energia SGPS (ENXTLS:GALP) Valuation After Recent Share Price Volatility

Mar -22

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Equinor Expands Barents Sea Potential With New Oil Discovery

Mar -20

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Are Oils-Energy Stocks Lagging Galp Energia (GLPEY) This Year?

Mar -20

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BP Agrees to Divest Gelsenkirchen Refinery Assets to Klesch Group

Mar -19

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (11.02%)

6. Segments

Commercial

Expected Growth: 12%

Galp Energia's 12% growth is driven by increasing demand for refined products, successful exploration and production activities, and strategic acquisitions. Additionally, the company's focus on operational efficiency, cost reduction, and investment in renewable energy sources have contributed to its growth momentum.

Industrial & Midstream

Expected Growth: 11%

Galp Energia's Industrial & Midstream segment growth of 11% is driven by increased refining margins, higher production volumes, and strategic investments in logistics and storage infrastructure. Additionally, the company's focus on operational efficiency, cost optimization, and supply chain management has contributed to the segment's growth.

Upstream

Expected Growth: 10%

Galp Energia's 10% upstream growth is driven by increased production in Brazil, particularly in the Santos Basin, and a strong performance in Angola. Additionally, the company's focus on cost optimization, efficient operations, and strategic partnerships have contributed to this growth. Furthermore, rising oil prices and a favorable regulatory environment have also supported the segment's expansion.

Consolidated Adjustments

Expected Growth: 8%

Galp Energia's 8% consolidated adjustments growth is driven by increased refining margins, higher sales volumes in the Iberian market, and a favorable crude oil price environment. Additionally, the company's strategic focus on cost optimization and operational efficiency has contributed to improved profitability.

Others

Expected Growth: 9%

Galp Energia's 9% growth is driven by increasing demand for refined products, successful exploration and production activities, and strategic acquisitions. Additionally, the company's focus on renewable energy and cost optimization initiatives have contributed to its growth momentum.

Renewables & New Businesses

Expected Growth: 15%

Galp Energia's Renewables & New Businesses segment growth of 15% is driven by increasing demand for clean energy, government incentives for renewable projects, and the company's strategic investments in solar and wind power. Additionally, the growth is fueled by the expansion of its new businesses, such as energy storage and electric mobility, which cater to the evolving energy landscape.

7. Detailed Products

Fuel

Galp Energia's fuel products include gasoline, diesel, and liquefied petroleum gas (LPG) for vehicles, as well as jet fuel for the aviation industry.

Lubricants

Galp Energia's lubricant products include motor oils, gear oils, and greases for vehicles, as well as industrial lubricants for machinery and equipment.

Bitumen

Galp Energia's bitumen products are used for road construction, maintenance, and repair, as well as for roofing and waterproofing applications.

Aviation Fuels

Galp Energia's aviation fuel products include jet fuel and avgas for the aviation industry.

Marine Fuels

Galp Energia's marine fuel products include bunker fuels and marine lubricants for the shipping industry.

Renewable Energy

Galp Energia's renewable energy products include wind and solar power, as well as biofuels and other alternative energy sources.

Natural Gas

Galp Energia's natural gas products are used for power generation, industrial processes, and residential heating and cooking.

8. Galp Energia, SGPS, S.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Galp Energia, SGPS, S.A. operates in the energy sector, which has few substitutes. However, the increasing adoption of renewable energy sources and energy-efficient technologies poses a moderate threat to the company's operations.

Bargaining Power Of Customers

Galp Energia, SGPS, S.A. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's operations are largely focused on the B2B segment, which further reduces customer bargaining power.

Bargaining Power Of Suppliers

Galp Energia, SGPS, S.A. relies on a few large suppliers for its raw materials, which gives them some bargaining power. However, the company's size and scale of operations also give it some negotiating power.

Threat Of New Entrants

The energy sector has high barriers to entry, including significant capital requirements and regulatory hurdles. This makes it difficult for new entrants to enter the market, reducing the threat of new competition.

Intensity Of Rivalry

The energy sector is highly competitive, with several established players competing for market share. Galp Energia, SGPS, S.A. faces intense competition from other energy companies, which can lead to pricing pressures and reduced market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 46.73%
Debt Cost 5.72%
Equity Weight 53.27%
Equity Cost 7.47%
WACC 6.65%
Leverage 87.73%

11. Quality Control: Galp Energia, SGPS, S.A. passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Growth: 7.3

Quality: 5.7

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Momentum: 8.0

Volatility: 7.0

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Quality: 5.1

Yield: 8.8

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Galp Energia

A-Score: 6.6/10

Value: 7.0

Growth: 7.0

Quality: 4.7

Yield: 8.1

Momentum: 7.5

Volatility: 5.0

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A-Score: 5.9/10

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

0.19$

Current Price

0.19$

Potential

-0.00%

Expected Cash-Flows