Total’s CEO Blames Stock Discount On European Listing

The primary listing on a stock market in Europe is the main reason for the discount at which TotalEnergies’ stock trades relative to the market value fundamentals of its U.S. competitors, TotalEnergies’ chief executive Patrick Pouyanné has said at meetings with investors in recent months.

However, TotalEnergies does not consider moving its primary listing to the United States, Pouyanné has said during recent meetings with investors, the Financial Times reports, citing sources familiar with the discussions.

“Culturally it was too difficult” to move TotalEnergies to the U.S., one of the largest shareholders in the French energy firm told FT.

CEO Pouyanné has said that “if Total was US-listed it would be much better but, of course, it is impossible for Total to move its listing so it’s not on the cards,” another shareholder told FT.

According to analysts, the U.S. supermajors, ExxonMobil and Chevron, are valued on the market at around six times their cash flows, while TotalEnergies is valued at around 4x the cash flow, with UK-based BP and Shell valued even lower, at around 3 times their cash flows. 

Two years ago, Shell’s executive leadership discussed relocating to the U.S. in order to boost the company’s valuation, FT reported earlier this year.

According to the FT’s sources, the supermajor’s new chief executive, Wael Sawan, was part of a team of top executives that two years ago considered moving Shell’s headquarters to the U.S. and listing the company there, too.

The relocation idea was ultimately dropped, but the FT notes that Shell’s chief executive remains worried about the difference in valuation between Shell and its U.S. peers.

Indeed, there has been a stark difference in the valuations of European and U.S. Big Oil majors. According to analysts, there are two primary reasons for this: the first is the greater clout that ESG investing has in Europe, and the other is that neither ESG-focused nor traditional investors seem to be particularly convinced of European Big Oil’s transition plans. 

By Tsvetana Paraskova for Oilprice.com

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