Origin Energy posted a strong first quarter with APLNG revenue of $634m net. This was up 24% and stemmed from higher realised pricing in both LNG and domestic gas.
In energy markets, weather-adjusted electricity demand was -4.5% below pre-pandemic levels while small commercial volumes were -8-10% lower. UBS observes a recovery in electricity demand continues to be hindered by strong growth in rooftop solar.
The company will cycle the Eraring power station capacity down to reduce exposure to lower average daytime electricity prices.
Buy rating retained. Target is raised to $6.00 from $5.85.
Sector: Energy.
Target price is $6.00.Current Price is $5.08. Difference: $0.92 – (brackets indicate current price is over target). If ORG meets the UBS target it will return approximately 15% (excluding dividends, fees and charges – negative figures indicate an expected loss).
