TotalEnergies Shares Decline by 2.73% Following Easing Tensions in the Middle East
TotalEnergies shares fell by 2.73% at midday on Monday, trading at 74.86 euros after closing at 76.96 euros on Friday. The session is marked by a highly fluid geopolitical context around the Strait of Hormuz, which directly impacts oil stocks. Meanwhile, UBS has significantly raised its price target on the stock.
Market Reactions to US-Iran De-escalation
The correction observed in TotalEnergies occurs in a context of de-escalation between the United States and Iran. On this Monday, March 23, Donald Trump described the talks with Tehran as 'very successful', postponing the military strikes he had threatened to initiate. The Strait of Hormuz, a vital artery through which a major portion of the world's crude oil passes, was at the heart of the American ultimatum. The postponement of military operations temporarily reduces the risk of disruption to oil flows, which logically weighs on the values of the energy sector.
The CAC 40, which had lost more than 2% in the morning due to initial fears, rebounded after this announcement and is now up by 0.61% in the session, at 7,712 points. However, TotalEnergies' stock does not benefit from this turnaround: the decline in geopolitical premium on crude penalizes the oil major. Shell is showing a similar trajectory with a decline of 3.26%. Despite today's drop, the stock still shows a gain of 3.5% over seven days and nearly 34% over three months, indicating a still solid upward momentum in the medium term.
UBS Raises Price Target on TotalEnergies
On the same Monday, UBS revised its price target on TotalEnergies upwards, from 75 to 89 euros, while maintaining its buy recommendation. This new target represents a potential for progression of about 19% compared to the current price of 74.86 euros. The Swiss bank seems to consider that the valuation of the group does not fully reflect its fundamentals, regardless of the day's geopolitical volatility.
Technically, the stock is in a watch zone. The RSI stands at 73, above the threshold of 70 generally associated with an overbought situation, which may partly explain the ongoing correction after the recent sharp rise. Moreover, the price is approaching the resistance identified at 78.59 euros, a level it has not managed to surpass. The 50-day moving average, located at 64.34 euros, remains significantly below the current price, confirming the underlying bullish trend that has been engaged in recent months. Noteworthy in the financial calendar: the detachment of the third installment on dividends is scheduled for March 31, followed by the publication of the first quarter results on April 29.
