TotalEnergies' (TTE) update delivered what many had expected, continued cash flow growth driven by an increasingly diversified set of businesses, RBC Capital Markets said Tuesday in a note.

The integrated power segment shifting from a drain on the dividend to be a contributor should help the company significantly reduce its breakeven over the coming years, according to the note.

TotalEnergies maintained its guidance to improve upstream volumes by more than 3% through 2030, but the company continues to look for new resources to supplement its portfolio post 2030, increasing its capital expenditure range to facilitate this, the note added.

The company plans to shift most of its liquified natural gas sales to be Brent-linked in the coming years, effectively taking a view that US gas prices will remain cheap relative to oil prices, the brokerage said.

TotalEnergies expects to degear well in excess of prior plans, supported by a strong a macro and despite higher distributions, the brokerage added.

RBC made small changes to its estimates, adjusting for the mix of distributions in 2026 and raising its 2027 distribution estimates.

RBC has an outperform rating on TotalEnergies with a price target of 85 euros ($96.3).

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