Overview
Jefferies has identified a widening split among European energy stocks since the Iran conflict erupted in late February. Investors have rewarded companies seen as direct beneficiaries of firmer oil and gas markets, while leaving several major names trading below what the brokerage considers justified by their fundamentals.
Market winners
Among integrated oil companies, Neste Oyj (LON:0O46) stands out. The stock has rallied 33% since the conflict began, driven by stronger diesel prices and regulatory support for renewable fuels that have lifted earnings expectations. Repsol (LON:0NQG) has climbed 17%, a move Jefferies links to the prospect of an upgraded share buyback and improving opportunities in Venezuela. Equinor ASA (LON:0M2Z) is up 13%, helped by firmer European gas prices and a clearer strategic outlook.
Names the broker views as oversold
By contrast, Jefferies points to several heavyweight energy firms whose shares have lagged despite what the bank describes as resilient fundamentals. Shell PLC (LON:SHEL) is flagged as a preferred oversold opportunity. Jefferies highlights Shell's acquisition of ARC Resources assets as extending reserve life and strengthening the rationale for a final investment decision on its Canada LNG project.
TotalEnergies SE (LON:TTEF) is also labelled oversold by the brokerage, with Jefferies noting that the company's diversified portfolio has helped mitigate Middle East risks. Ithaca Energy PLC (LON:ITH) is cited as providing greater flexibility to pursue acquisitions.
Exploration and production outlook
Within exploration and production, Vår Energi has risen 15% on expectations of extraordinary dividends and long-term production growth. Tullow Oil has gained 11% after completing refinancing and extending debt maturities. Jefferies argues that other stocks in the space - including Serica Energy, Harbour Energy and Kosmos Energy - now look oversold despite improving balance sheets, stronger liquidity and progress on strategic projects.
Oilfield services and reconstruction upside
The brokerage also highlights opportunities among oilfield service companies. Maire, Technip Energies, GTT and TechnipFMC have underperformed even though they face limited direct disruption from the Middle East conflict and maintain healthy order pipelines. Jefferies suggests these companies could benefit should regional reconstruction spending pick up once geopolitical tensions ease.
Why the dispersion matters
Jefferies characterises the broad dispersion in share-price performance as reflecting investor debate about which companies deserve a geopolitical premium and which have been unfairly left behind. That debate, the bank says, has created selective buying opportunities across the European energy sector.
Note on data and positioning
The brokerage’s assessment draws a distinction between stocks where recent gains are supported by improving earnings prospects and those that appear oversold despite limited operational exposure to the Iran conflict. Jefferies’ view highlights potential areas for investors to reassess positions based on company-specific fundamentals rather than sector-wide moves.