Morgans observes the stock has declined -25% over the last year, amid concerns about regulation in the electricity market and a volatile oil price.
Morgans believes the market has over-reacted to the risks and has not adequately accounted for the factors that may mitigate some of those risks.
The broker believes Origin Energy will have capacity to increase dividends from much stronger cash flows after de-leveraging.
The broker maintains an Add rating and raises the target to $8.15 from $8.09.
Sector: Energy.
Target price is $8.15.Current Price is $7.08. Difference: $1.07 – (brackets indicate current price is over target). If ORG meets the Morgans target it will return approximately 13% (excluding dividends, fees and charges – negative figures indicate an expected loss).
