A rally in Brent oil has boosted expectations for FY22 APLNG earnings. Around 62% of Origin Energy’s value and 77% of the equity value Macquarie believes can be attributed to APLNG and its significance has grown in the past three years.
The surge in such income will mitigate the ongoing pressure on the electricity contribution. The broker suggests a cyclical low is now being witnessed in pricing but it is less clear where the impetus will come from without further moves in the oil price or a corporate restructure.
Neutral rating retained. Target is reduced to $5.21 from $5.44.
Sector: Energy.
Target price is $5.21.Current Price is $4.73. Difference: $0.48 – (brackets indicate current price is over target). If ORG meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges – negative figures indicate an expected loss).
