TotalEnergies raises Q4 share buybacks to $2.5 billion

On September 28, TotalEnergies raised its fourth-quarter share buyback program to $2.5 billion, up from $1.5 billion. The company announced plans to repurchase between $2 billion and $2.5 billion of shares in the first quarter of 2027 and target annual dividend growth exceeding 5% through 2030.

The increased distributions accompany plans to expand oil and gas production by 2% to 3% annually from 2030 to 2035, supported by assets in Namibia, Nigeria, Malaysia, Mozambique, and Papua New Guinea. Between 2025 and 2030, hydrocarbon output is projected to rise more than 3% annually, while electricity generation is set to grow over 20% annually to reach 100 to 120 TWh by 2030. Overall energy output is expected to expand around 4% per year through 2030.

The company reduced its net debt by $3.3 billion in the second quarter, bringing its gearing ratio down 2.4 percentage points sequentially to 13.1%. Management expects gearing to drop below 10% by the end of 2026. TotalEnergies targets shareholder returns equal to 40% of cash flow, with CEO Patrick Pouyanné stating that annual distributions need to reach roughly $7.5 billion to $8 billion. Net annual investments are guided at $14 billion to $17 billion from 2027 through 2032, supported by an anticipated $4 billion to $5 billion in additional operating cash flow between 2025 and 2030.

In the second quarter, TotalEnergies generated $9.8 billion in cash flow, up nearly 15% sequentially, and $6 billion in adjusted net income. Integrated Power adjusted cash flow rose 25% sequentially to $700 million. In September, the firm launched a three-year partnership worth over €100 million with Mistral for exploration and reservoir AI models. Alongside SOCAR and XRG, it also took a final investment decision on the Absheron project in Azerbaijan, which aims to add about 5 billion cubic meters of annual gas within three to four years.

Brent averaged $104 per barrel in the second quarter compared to $81 in the first quarter, though CEO Patrick Pouyanné emphasized that five-year plans remain based on $60 oil. Following the announcements, JPMorgan analyst Matthew Lofting downgraded the stock to Neutral from Overweight with an €83 price target. Piper Sandler kept a Neutral rating and lifted its target to $93 from $84.