UBS is positive regarding refining industry and prefers Ampol to Viva Energy ((VEA)). This stems from the belief that earnings growth will be greater and separate from the recovery in fuel demand.
As Ampol has acquired Z Energy the broker maintains a Buy rating and lifts estimates for earnings per share by 13-17%, also expecting higher refining margins in the first half.
UBS also expects $30m in EBIT growth in convenience retail as the benefits from initiatives implemented over recent years are realised. Target is raised to $39.40 from $35.65.
Sector: 0.
Target price is $39.40.Current Price is $35.31. Difference: $4.09 – (brackets indicate current price is over target). If ALD meets the UBS target it will return approximately 10% (excluding dividends, fees and charges – negative figures indicate an expected loss).
