Despite guidance for Energy Markets earnings (EBITDA) being lowered by -8% for FY21, most of the impact is offset by a strong upstream performance from the APLNG joint venture, explains Morgans. Thus, the recent share price fall is considered excessive.
The broker highlights that approximately 39% of the guidance drop was driven by an adverse ruling in a dispute with Beach Energy ((BPT)) on Victorian gas repricing and the remainder due to ongoing electricity market weakness.
The Add rating is unchanged and the target price is decreased to $5.79 from $5.91.
Target price is $5.79.Current Price is $4.19. Difference: $1.60 – (brackets indicate current price is over target). If ORG meets the Morgans target it will return approximately 28% (excluding dividends, fees and charges – negative figures indicate an expected loss).