Goldman Sachs Says Shell, BP and Other European Integrated Majors Stocks Will Rally Over by 50% this Year

Goldman Sachs, one of the world’s leading investment banks, has picked oil stocks expected to rally by over 50 percent in 2021 as economies gradually reopen and the transport market recovers.

Analysts at the world-leading investment bank said a strong recovery is expected from the sector in the second half of the year.

“As we look farther into 2021, we believe that the combination of oil price recovery, improving downstream margins and cost-cutting will trigger the beginning of a positive earnings revision cycle for the European integrated majors,” Goldman’s analysts led by Michele Della Vigna wrote in a note published this week.

Goldman Sachs said BP has the highest upside potential, largely due to its huge exposure to transportation oil demand, the net-zero pledge and the possibility of share buybacks.

The company also stated that BP’s ADRs listed on the New York Stock Exchange has the potential to rally as much as 60 percent in the next 12 months while the London-listed could do 54 percent.

It further stated that Shell’s stock could rally by 30 percent, France’s Total could jump by 26 percent, Repsol of Spain could do 18 percent, and Italy’s Eni by 15 percent.

Goldman Sachs added that “A transportation recovery can reignite momentum for the underlying commodity and Big Oils equities, which we expect could be one of the key recovery/value trades in the coming months.”