03:30 PM EDT, 10/03/2024 (MT Newswires) -- TotalEnergies (TTE) is continuing its strategy of prioritizing growth in liquefied natural gas and power while being "selective" with oil, RBC Capital Markets said Thursday in a report.

"We continue to see the investment case driven in part by the company's ability to execute on the growth projects, and it is the portfolio depth that sets it apart from European peers," RBC said.

With near-term capital expenditures set to rise and the company in a "heavy execution phase," free cash flow looks more attractive from 2028 onward, and "it is too early to turn more positive," RBC said.

There's evidence of rising costs and project delays, which may crimp returns and free cash flow, RBC said.

"The macro environment remains volatile, and based on our recent investor meetings, we sense there is greater focus on downside than upside risk amid weakening oil product demand and OPEC+ news flow," RBC said.

RBC maintained a sector perform rating on the energy giant with a price target of 80 euros ($88.25).

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