Equinor: Muted Earnings Outlook and Conservative Capital Returns Support Neutral Hold Stance

Jason Gabelman, an analyst from TD Cowen, maintained the Hold rating on Equinor ASA. The associated price target remains the same with $22.00.Claim 70% Off TipRanks PremiumUnlock hedge fund-level data and powerful investing tools for smarter, sharper decisions Stay ahead of the market with the latest news and analysis and maximize your portfolio's potential Jason Gabelman has given his Hold rating due to a combination of factors relating to Equinor’s earnings outlook, capital returns, and risk profile. He trims his 4Q25 EPS forecast to align with consensus, reflecting weaker commodity prices, lower-than-expected realizations, and a higher guided tax rate, only partly offset by a one-off operating benefit in Norway and stronger divestment proceeds. While asset sales exceeded prior expectations by about $1 billion, this appears tied to specific transactions and does not fundamentally alter the medium-term earnings trajectory. Overall, the revisions suggest a more muted earnings and free cash flow profile than previously assumed, but not weak enough to warrant a negative rating.Gabelman also expects the company to announce a 2026 share repurchase program of roughly $2 billion, which is below market expectations and implies a more conservative distribution strategy in the near term. Although projected 2026 distribution and free cash flow yields are still reasonably attractive, they are weighed down by lower commodity prices, lagged Norwegian tax payments, and elevated capex, including substantial spending on the Empire Wind project before related tax benefits are realized. Net debt is projected to rise meaningfully by the end of 2026, adding to balance sheet considerations. In addition, Equinor’s sizeable exposure to global gas markets—where prices are expected to soften—and uncertainty around the strategic direction of its ORSTED investment further temper the risk/reward, leading Gabelman to maintain a neutral, Hold stance rather than recommend buying the stock. According to TipRanks, Gabelman is a 4-star analyst with an average return of 5.9% and a 57.02% success rate. Gabelman covers the Energy sector, focusing on stocks such as Chevron, Exxon Mobil, and Phillips 66.