WPL – Citi rates the stock as Neutral

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Citi analysts are entertaining scenarios whereby Woodside’s balance sheet would allow for full funding for the Browse project. On their calculations, this is possible if crude oil averages US$65/bbl and with some leniency from credit agencies. The latter is seen as possible.

Also, there remains potential for synergies in between projects which means capex burden might turn out less. If the capex for each project were to reduce by -10%, say the analysts, Citi’s risked DCF valuation would lift by $0.27/share, or 0.8%.

Target price remains $34.14. Rating remains Neutral. No changes made to forecasts.

Sector: Energy.

Target price is $34.14.Current Price is $36.94. Difference: ($2.80) – (brackets indicate current price is over target). If WPL meets the Citi target it will return approximately -8% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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