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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 solid earnings estimate revisions, indicating potential upside for the company. The Portuguese oil-and-gas producer received nonbinding offers from oil companies to partner at its Mopane discovery in Namibia, a project that analysts believe could boost the company's share price. Additionally, the company's refining margins improved, as seen in Phillips 66's Q2 earnings beat, which was driven by increased refining volumes and higher realized refining margins worldwide.

1.c. Company Highlights

2. Galp's Q3 2025 Earnings: A Strong Performance Across Businesses

Galp's third-quarter 2025 results showcased a solid operating performance across its businesses, translating into robust cash delivery. The company's EPS came in at 0.54, beating analyst estimates of 0.4363. The upstream segment performed well, with production in Brazil reaching 115,000 barrels per day, driven by high fleet availability. The downstream businesses in Iberia also captured strong seasonal trends, posting record-high quarterly EBITDA. Galp's 9-month operating cash flow remained flat compared to 2024, despite a decline in Brent prices, showcasing the company's resilience.

Publication Date: Oct -28

📋 Highlights
  • Upstream Production in Brazil:: Achieved 115,000 barrels per day driven by high fleet availability, supporting annual guidance.
  • Bacalhau Project Milestone:: Reached first oil, expected to deliver ~40,000 bpd and €400M annual OCF at plateau by 2027 (€70 Brent).
  • Downstream EBITDA Record:: Iberia posted record quarterly EBITDA due to strong seasonal trends and 20% fuel volume growth YoY.
  • Cash Flow Resilience:: 9-month operating cash flow flat vs. 2024 despite Brent dropping over $10, with net debt reduced to 0.4x.
  • Capital Expenditure:: Guided for ~€0.8B annual CapEx, including €2.4B gross over 2025-2026, with renewables investment at €150-200M/year.

Financial Performance

The company's financial performance was strong, with a net debt ratio of 0.4x and a reduction in net debt. Galp's guidance for group EBITDA and OCF is expected to be exceeded for the year. The current dividend breakeven is just below $40 for 2026, and the company maintains a cash distribution guideline of 1/3 of OCF, with room for flexibility. With a P/E Ratio of 13.47 and an EV/EBITDA of 5.8, the market seems to be pricing in a reasonable valuation.

Operational Highlights

The Bacalhau project reached first oil, a key milestone driving free cash flow growth. The production contribution in Q4 is expected to be slow, with a ramp-up of at least a year. The full contribution of approximately 40,000 barrels per day share is expected in 2027, generating around EUR 400 million in OCF per annum at plateau, assuming a $70 Brent price. In Iberia, the downstream businesses posted record-high quarterly EBITDA, driven by strong seasonal trends.

Low-Carbon Investments and Capital Expenditure

Galp continues to invest in low-carbon initiatives, with approximately EUR 1.5-1.6 billion in capital employed. The company guides for approximately EUR 0.8 billion per year in CapEx, with a gross CapEx of about EUR 2.4 billion accumulated over 2025-2026. For 2026, CapEx is expected to be slightly lighter than in 2025, around EUR 400 million for the normal run rate, plus around EUR 150-200 million for renewables and EUR 100 million for commercial transformation.

Outlook and Guidance

Galp expects to exceed its group EBITDA and OCF guidance for the year. The company is focused on achieving a partnership for the Mopane asset in Namibia, with discussions showing good progress. Analysts estimate next year's revenue growth at 2.3%. The refining outlook for November, December, and Q1 hasn't changed significantly, with expectations of lower margins in Q1 due to 20-40% of Russian capacity being affected and lower inventory levels on both sides of the Atlantic.

3. NewsRoom

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Chevron & TotalEnergies Lead Bidding War for Galp's Namibia Project

Nov -20

Source: zacks.com

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4 Refining & Marketing Stocks Gaining From Industry Tailwinds

Nov -17

Source: zacks.com

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Bernstein sees double-digit yield for oil majors on $65 Brent in 2026

Nov -17

Source:

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European Dividend Stocks To Consider

Oct -30

Source:

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Galp Expects to Exceed Full-Year Guidance After Earnings Rise

Oct -27

Source:

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Galp to select partner for Namibia’s Mopane field by year-end

Oct -22

Source:

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Galp Bets on Africa and Brazil as Oil Demand Defies Energy Transition

Oct -21

Source:

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Exploring Galp Energia (ENXTLS:GALP) Valuation Following a Period of Share Price Stability

Oct -19

Source:

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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Aker BP

A-Score: 6.9/10

Value: 6.0

Growth: 7.3

Quality: 5.5

Yield: 10.0

Momentum: 6.0

Volatility: 6.3

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Repsol

A-Score: 6.7/10

Value: 7.1

Growth: 5.6

Quality: 2.5

Yield: 8.8

Momentum: 8.0

Volatility: 8.3

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OMV

A-Score: 6.7/10

Value: 7.7

Growth: 3.8

Quality: 4.2

Yield: 9.4

Momentum: 7.0

Volatility: 8.0

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TotalEnergies

A-Score: 6.1/10

Value: 7.3

Growth: 4.7

Quality: 5.1

Yield: 8.8

Momentum: 2.0

Volatility: 9.0

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SBM Offshore

A-Score: 5.8/10

Value: 7.6

Growth: 5.3

Quality: 3.9

Yield: 3.1

Momentum: 8.0

Volatility: 7.0

1-Year Total Return ->

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Galp Energia

A-Score: 5.6/10

Value: 5.7

Growth: 7.0

Quality: 4.6

Yield: 5.6

Momentum: 4.0

Volatility: 6.7

1-Year Total Return ->

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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

0.17$

Current Price

0.17$

Potential

-0.00%

Expected Cash-Flows