Worley revealed growing momentum in its traditional and transitional projects at its investor day, observes UBS: the headcount and factored sales pipeline are up 7%; and the backlog of projects has risen 8% to $15.4bn.
UBS speculates that much of this growth relates to the green transition and oil and gas markets as geopolitical tensions rise. The broker estimates sustainability-based projects now represent roughly 32% of Worley’s revenues, which Worley hopes to lift to 75% in five years.
Management reiterated revenue, earnings and margins guidance for the June half. EPS forecasts rise 3% in FY23 and FY24.
Buy rating retained, UBS pegging Worley as an energy transition winner offering a 10-year EPS compound annual growth rate of 10%. Target price rises to $16.40 from $14.40.
Sector: Energy.
Target price is $16.40.Current Price is $14.93. Difference: $1.47 – (brackets indicate current price is over target). If WOR meets the UBS target it will return approximately 9% (excluding dividends, fees and charges – negative figures indicate an expected loss).
