TotalEnergies downgraded by Morgan Stanley despite strong Q2 earnings and Namibia asset acquisition

Morgan Stanley downgraded TotalEnergies from Overweight to Equal Weight, citing valuation concerns despite the company's strong Q2 results. TotalEnergies reported $6 billion in adjusted net income and $9.8 billion in operational cash flow, while acquiring a 40% stake in Namibia's PEL 83 license with 1.3 billion barrels of oil equivalent resources. The share price near $89.25 limits upside potential, and regional Middle East conflicts have reduced production by 210,000 barrels per day. TotalEnergies plans further exploration in Namibia and maintains a steady dividend, but risks remain from valuation and geopolitical factors.