Europe is heading into winter with thinner-than-usual gas inventories, and that could set TotalEnergies up for a stronger third quarter, according to analysts at German investment bank Berenberg.
In a note, Berenberg argued that the global liquefied natural gas (LNG) market remains tight, which can make prices more volatile if cold weather or supply disruptions hit Europe. That backdrop matters for TotalEnergies, a French energy major with a large integrated LNG business, because the bank expects its LNG unit to earn about $1.58 billion in the third quarter, up from $807 million in the second quarter, though still below the $1.71 billion analyst consensus.
Berenberg also sees refining and chemicals improving to $2.90 billion from $1.80 billion, topping the $2.22 billion expected by the market. Even so, the bank kept its hold rating and €84 price target, despite lifting its longer-term European gas forecasts to $19 per thousand cubic feet in 2026, $15 in 2027, and $10 in 2028.
Why gas inventories matter
Natural gas is a key fuel for heating and power generation, and Europe relies heavily on imports, especially LNG, to meet demand. When inventories are lower than normal going into winter, the market becomes more sensitive to any disruption—whether that's a cold snap, a pipeline outage, or a geopolitical event. That can push prices higher, which is good news for producers like TotalEnergies that sell gas on the global market.
Berenberg's view reflects a broader trend: Europe's Q3 earnings forecast has climbed to 21% growth, but much of that is skewed by energy companies benefiting from higher commodity prices. For TotalEnergies, the tight LNG market is a tailwind, but the bank's forecasts suggest the market is already pricing in much of that strength.
What it means for investors
When a broker raises profit expectations but leaves its price target unchanged, it's effectively saying the stock shouldn't trade at a higher valuation multiple just because the outlook improved. In this case, the upside from tighter gas markets is treated as something that helps near-term earnings, not something that changes how much investors will pay for each euro of profit.
That shifts the focus to the earnings "print" versus expectations: Berenberg's LNG forecast ($1.58 billion) is still below consensus ($1.71 billion), while its refining and chemicals view ($2.90 billion) is above the market's $2.22 billion. So the overall picture is mixed—stronger refining and chemicals could offset a slight miss in LNG, but the stock's reaction will depend on how the numbers compare to what investors were already expecting.
For everyday investors, this is a reminder that analyst ratings and price targets are not a recommendation to buy or sell. They're one view of a company's prospects, and they can change quickly as new data comes in. If you own TotalEnergies shares, the key thing to watch is the actual third-quarter results, which will show whether the company can deliver on these expectations.
Berenberg's decision to lift its gas price forecasts while keeping the price target unchanged also suggests that the bank sees limited upside in the stock from here. That could be because TotalEnergies' valuation already reflects a lot of good news, or because the bank expects gas prices to ease after the winter.
In the meantime, the broader energy market remains in focus. Oil prices have slipped while gold has jumped as storms and strikes rattle commodity markets, and African markets are weighing an oil dip alongside steady rates and Nigeria's fuel cap. These factors can influence TotalEnergies' other businesses, but for now, the LNG story is the main driver.
Berenberg's note is one of many that investors will see as earnings season approaches. The key takeaway is that Europe's tight gas market could give TotalEnergies a boost in the third quarter, but the stock's valuation suggests that much of that good news is already priced in.
