In line with prior guidance Following its disappointing trading update of early July Repsol reported Q2 2021 results that were modestly ahead of a previously lowered consensus. As guided, the main area of weakness was in the Upstream which saw a significant reduction in volumes given production issues across several assets, with the company guiding down on its expectations for the full year. Set against this reported numbers elsewhere were if anything better than we had assumed prior to the trading update, not least in Chemicals where Repsol has been able to capture a significant part of the upside from global capacity outages. We modestly downgrade our full year expectations but with the shares trading at the bottom of their recent range and below our target price move the shares to Neutral. Mixed quarter. Decent industrial but disappointing Upstream A somewhat mixed quarter. In the Industrial businesses Chemical strength more than offset the continuing expected weakness in refining markets given another extremely strong quarter for bulk margins. In the commercial business a very healthy margin recovery in Mobility and excellent lubricant results made for a robust performance. Upstream, however, a mixture of unexpected outages, PSC effects and asset sales resulted in the company reducing its full year production guidance to towards 600kboe/d, a c8% downgrade. In fairness to Repsol the sources of the negatives were by and large across non-operated assets not least in Peru (Hunt Oil) and Trinidad (BP) and are expected to have largely unwound by the end of the current quarter. Raise to Neutral despite a modest clip to earnings Away from the traditional businesses the company has raised its expectations for the build out of its renewables pipeline largely following its acquisition of a 40% interest in the US solar development business Hecate. Repsol now guides to over 8GW of capacity in place by 2025. Group capex guidance was also raised by...