Investing.com -- Brokerage firm Mizuho Securities has launched equity research coverage on three major European integrated oil companies, BP (NYSE: BP), Shell (NYSE: SHEL) and TotalEnergies (NYSE: TTE), assigning Outperform ratings to the former two and a Neutral rating to Shell.

The brokerage set a price target of $51 per American Depositary Share (ADS) for BP, implying the stock is undervalued given "above-peer Return on Capital Employed (ROCE), focus on debt reduction (vs. cash returns), high dividend yield, and discounted valuation relative to IOC peers," analysts led by Nitin Kumar said.

They said BP has made progress since its 2025 strategy reset back toward oil and gas, citing 12 discoveries in 2025 headlined by the Bumerangue find in Brazil, and expect "an accelerated rate of change" under incoming CEO Meg O’Neill.

Mizuho’s biggest concern for BP centers on reserve depth, noting organic reserve replacement of only about 0.6x between 2023-25, versus a 0.8x peer average.

TotalEnergies received the highest price target among the three, $103 per share, with Kumar pointing to the company’s "differentiated, dual-engine growth strategy that balances investments in traditional hydrocarbons with capital-efficient low carbon (primarily power generation) investments."

He highlighted TotalEnergies’ deepest resource base among peers, roughly 12 years of reserve life, its lowest production costs at $4.81/boe, and expectations that its Integrated Power segment turns free-cash-flow positive and begins contributing to the dividend by 2027. Mizuho estimates the power business alone is worth around $14-15 per share in its base case, with upside to $25-30 under more aggressive assumptions.

Lastly, Shell was initiated at Neutral with a $98 price target. Kumar views the stock as offering a "balanced risk-reward." The analyst pointed to Shell’s leading position in global LNG and its sector-leading cash returns — a roughly 9.2% total cash return yield in 2026 versus a 6.5% peer average — as key strengths.

However, he flagged below-peer reserve life, higher balance-sheet leverage, and integration risk tied to the pending $16.7 billion acquisition of ARC Resources as reasons to stay on the sidelines for now.