Total: Morgan Stanley no longer a buyer
(CercleFinance.com) - Yesterday, Morgan Stanley downgraded its buy ("Overweight") rating on the Total share, having now adopted a neutral stance ("Equal-weight").
Along with this downgrade, the broker has cut its associated target price from 55 euros to 49 euros.
The main argument developed by analysts is Total's returns to its shareholders. Admittedly, over the last 12 to 18 months the consensus for free cash flow has been considerably reduced for the French oil giant. This is to such an extent that in organic terms, analysts deem that market expectations seem excessive for 2020 and 2021 at around twice the overall dividend, while Morgan Stanley targets about 1.5/1.6 times.
The broker therefore says, "we believe consensus FCF overestimates the amount that is available for shareholders and we no longer expect an acceleration in distributions."
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