Credit Suisse had been of the view that Origin Energy did not offer compelling value relative to oil & gas peers, based on implied prices and a negative outlook for energy markets.
With a recovery in oil prices, equities and the share price this has now now proved true in an absolute sense.
Origin Energy remains the broker’s preference as it has less exposure to falling wholesale prices compared with AGL Energy ((AGL)).
Neutral rating retained. Target rises to $6.20 from $5.30. The FY20 result is scheduled for August 20.
Target price is $6.20.Current Price is $5.76. Difference: $0.44 – (brackets indicate current price is over target). If ORG meets the Credit Suisse target it will return approximately 7% (excluding dividends, fees and charges – negative figures indicate an expected loss).