TotalEnergies Reaffirms $2.5 Billion Share Buyback in Fourth Quarter of 2026

Key Facts

TotalEnergies reaffirmed a plan to buy back $2.5 billion of shares in the fourth quarter of 2026, after its board authorized the buyback on September 28, according to the company's results statement issued on October 29. This places the buyback within a plan announced before the results were published, rather than as a new decision taken on the day of their release. The company also said it expects to buy back shares worth between $2 billion and $2.5 billion in the first quarter of 2027. It ties its shareholder return policy to a minimum of 40% of cash flow, alongside reducing debt. The plan was reaffirmed after cash flow reached $12.3 billion in the third quarter, which the company described as a sharp increase from the previous quarter.

Adjusted net income was $9.1 billion in the third quarter of 2026, and the company said it rose clearly on a quarterly basis. Cash flow was $12.3 billion, a sharp increase from the second quarter, according to the results statement. On operating metrics, the European refining margin indicator rose to $33.2 per barrel in the third quarter, from $13.5 per barrel in the second quarter, according to data reported by Reuters. Hydrocarbon production also reached 2.47 million barrels of oil equivalent per day, up 3% from 2.40 million barrels per day in the previous quarter. Chief Executive Patrick Pouyanné said the company was operating in a "high-price environment characterized by historically high refining margins and a rising gas market."

The strong cash flow coincided with a decline in the gearing ratio, which stood at 9.1% on September 30, compared with 13.1% on June 30, according to Reuters data. The company's statement said the ratio fell below 10% at the end of the third quarter. When it approved the buyback plan, the company had forecast that the gearing ratio would be below 10% by the end of 2026, meaning it reached that level ahead of schedule. The company places debt reduction alongside shareholder returns in its financial framework, rather than presenting the buyback as a separate use of cash flow. This context underscores the plan's connection to the balance sheet and cash flows recorded during the quarter.

The dividend policy includes a third interim payment for fiscal 2026 of 0.90 euros per share, announced by the board on October 29. The payment represents an increase of 5.9% compared with 2025 dividends, according to the company. The company also confirmed its target of increasing dividends by more than 5% annually for fiscal years 2026 to 2030. It links this increase to a shareholder return of at least 40% of cash flow, alongside reducing debt. The announced plan thus combines share buybacks and cash dividends as part of a broader returns policy.

The company's strategy includes operational and investment targets that extend beyond the near-term buyback plan. It is targeting annual energy production growth of 4% through 2030 and expects free cash flow to increase by about $10 billion between 2025 and 2030, based on the same price assumptions. From 2027 to 2032, it plans annual net investment of between $14 billion and $17 billion. It is also targeting annual oil and gas production growth of between 2% and 3% during 2030–2035, while maintaining production of about 3 million barrels of oil equivalent per day through 2035. These targets provide a long-term context for allocating capital between investment and shareholder returns.

In the near term, the company expects to buy back shares worth between $2 billion and $2.5 billion in the first quarter of 2027, following the $2.5 billion program in the fourth quarter. It had scheduled its third-quarter results presentation for October 29, from 1:00 to 2:30 p.m. London time, when the results statement reaffirmed the buyback plan. The announced plan for the first quarter sets out the next spending range, while the dividend policy through 2030 remains part of the company's guidance to shareholders. The forecast for a gearing ratio below 10% was tied to the end of 2026, after the ratio had already fallen below that level at the end of the third quarter. The next announced steps are based on these timelines and financial targets set by the company.