Morgans sees significant upside for patient investors in Origin Energy. However, in the short term the broker finds it hard to identify a catalyst that may close the gap between the current share price and the analyst’s valuation.
After a quarterly update, Morgans notes APLNG’s commodity revenues fell sharply on lower realised prices. Electricity volumes are considered to be recovering, but business gas demand is still soft.
The broker lifts the free cashflow and dividend forecast on lower capital expenditure and cash tax payments.
The Add rating is unchanged and the target price is decreased slightly to $6.23 from $6.34.
Sector: Energy.
Target price is $6.23.Current Price is $4.01. Difference: $2.22 – (brackets indicate current price is over target). If ORG meets the Morgans target it will return approximately 36% (excluding dividends, fees and charges – negative figures indicate an expected loss).
