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US NEWS 
January 21, 2022
Goldman Sachs sees big oil companies perform well in 2022, boosted by strong positive consensus earnings revisions, improved ESG credentials and accelerating buybacks
The brokerage points to “an era of structurally higher commodity prices on diminishing spare capacity” which will further fuel earnings momentum during 2022
The implementation of the EU Green Taxonomy should highlight the materiality of the big oil companies rising low carbon investments, GS adds, improving ESG standards.
“The macro remains particularly supportive,” it notes, with the market still in large deficit despite Omicron demand impact, low levels of inventories and OPEC+ spare capacity
It also expects higher cash returns to shareholders, given the acceleration of major buyback programmes and dividend rises
“The re-ignition of the cash flow engine implies European Big Oils offer on average an around 20% FCF yield (2022-2023) on our estimates, a historical high,” the brokerage says
According to its forecasts, BP, Shell, ENI and Equinor lead the group in terms of total cash returns, GS flags.
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