Beach Energy’s FY21 underlying profit beat Morgans by 9%, while FY22 production guidance was -17% lower than forecast. Production in the Western Flank is declining faster than assumed, and the larger increases in Otway gas production will come in FY23.
The broker maintains its Add rating and reduces its target price to $1.65 from $1.77. There’s expected to be significantly lower free cash flows, meaning new debt facilities will likely be required to fund growth plans.
Sector: Energy.
Target price is $1.65.Current Price is $1.04. Difference: $0.61 – (brackets indicate current price is over target). If BPT meets the Morgans target it will return approximately 37% (excluding dividends, fees and charges – negative figures indicate an expected loss).
