Equinor – EQNR

Fundamental analysis
Equinor ASA is a Norwegian multinational oil exploration and production company headquartered in Stavanger. It currently operates in 36 countries worldwide. The primary owner is the Norwegian government with 67% of the shares, the rest is freely tradable on the Norwegian and US (NYSE) stock exchanges. The company has 22,000 employees worldwide and supplies energy to 170 million people.
The main focus is oil and gas production, as well as low-carbon solutions and renewable energy. Like any oil producer, Equinor is a highly profitable company. In 2022, the company achieved sales of $150 billion on profits of $79 billion. The company returned $13.7 billion to investors through dividends and share buybacks. The company has free cash flow of USD 24 billion (down USD 8 billion from 2022). The company’s main goal is to be carbon neutral by 2050. Equinor pays a regular dividend. The stock has lost 3% of its value over the past year, and 10% since the beginning of the year.
Results
For 2023, the company increased its production by 2.1%. Equinor raised its dividend for the final quarter of 2023 to $0.35 per share. For 2024, it expects to increase its annual dividend by 2%. For 2024 and 2025, Equinor expects to repurchase $10-12 billion of shares, with $6 billion in share repurchases in 2024.
Technical analysis
Equinor has a volume well above 1 million shares traded per day, so the spread is small and liquidity is high.
In this chart, exceptionally, an oil chart is added to compare the swings. Equinor, like any oil producing company, has a high correlation with the price of oil. When oil does well, Equinor will do well. However, you can see from the chart that the correlation is not 100%. It can be concluded that due to the diversification of products (not only oil, but also natural gas and renewables), Euqinor is less dependent on oil price fluctuations. Moving averages are now in a downward trend, but the spread is narrowing. There has been no visible growth over the last year. The RSI is in the neutral zone. The last signal generated in February 2024.
Conclusion
Equinor is a stable mining company with high profits. This does not necessarily translate to profits for the investor. The share price has been straddling the line for the past few months and lacks a clear, strong trend. It is likely that until the oil price moves more, neither will Equinor’s price. On the other hand, shareholder value retention is solid, with the company paying a regular dividend. Expectations for share buybacks in 2024 are high. If an investor is not expecting immediate appreciation, but value preservation in a stable company, Equinor may be an interesting choice. On the other hand, even such an investment carries risks in the form of sudden fluctuations in the commodity market.