Backed by lower crude premiums, Ampol’s Lytton refinery saw its December quarter operating loss go down to -$4m, a far cry from the -$82m loss seen in the third quarter. Ampol’s closing debt levels for the quarter were also much better than anticipated.
While the company still faces headwinds in the form of legal battles with Chevron and EG Group, Macquarie considers the fuels industry structure in Australia attractive and believes the earnings outlook for Ampol is attractive with better volumes and C-store experience.
Outperform retained with a target price of $34.65.
Target price is $34.65.Current Price is $28.58. Difference: $6.07 – (brackets indicate current price is over target). If ALD meets the Macquarie target it will return approximately 18% (excluding dividends, fees and charges – negative figures indicate an expected loss).