The company has focused on organic growth options in the Asian LNG market at its investor presentation. Capital intensity has been reduced for Scarborough but Macquarie suspects gas buyers are still unwilling to commit.
The company acknowledges Scarborough may go to a final investment decision with less than 50% of the project contracted, while typically at least 70% is contracted. This will shift much of the risk back to Woodside, the broker notes. Macquarie retains a Neutral rating and $31.90 target.
Target price is $31.90.Current Price is $33.64. Difference: ($1.74) – (brackets indicate current price is over target). If WPL meets the Macquarie target it will return approximately -5% (excluding dividends, fees and charges – negative figures indicate an expected loss).