UBS believes processing Scarborough gas at the North West Shelf (NWS) is the most value accretive of the various approaches assessed. The broker believes if Woodside Petroleum acquires an additional 33% equity in the NWS, this may allow the company to pivot towards the higher value Scarborough concept.
The broker believes the market has oversold Woodside on growth capex concerns over the next 4 years. Noting the company offers the highest dividend yield of the Australian large-cap energy stocks, UBS maintains a Buy rating and reduces the target to $23.50 from $26.
Target price is $23.50.Current Price is $18.42. Difference: $5.08 – (brackets indicate current price is over target). If WPL meets the UBS target it will return approximately 22% (excluding dividends, fees and charges – negative figures indicate an expected loss).