Woodside has exited the second quarter with revenue of $1.29bn, 7% ahead of UBS forecasts, despite facing higher costs through the period associated with exiting Kitimat LNG. Results were driven by higher third-party trading volumes and higher realised oil prices.
UBS decreases expected earnings per share for 2021 by -18% to reflect higher trading costs, and increases expenditure expectations to account for hedging activities and Kitimat exit costs.
UBS expects an updated on the Scarborough development cost review ahead of first half results, but is forecasting gross capital expenditure of $12.3bn. The broker points to near-term steps to de-risk Scarborough and a new CEO appointment as catalysts to help the stock re-rate.
The Buy rating is retained and the target price decreases to $26.10 from $26.20.
Sector: Energy.
Target price is $26.10.Current Price is $22.74. Difference: $3.36 – (brackets indicate current price is over target). If WPL meets the UBS target it will return approximately 13% (excluding dividends, fees and charges – negative figures indicate an expected loss).
