Origin Energy has announced an initial $250m market share buyback on the back of strong cashflow supported by oil pricing, suggesting to Macquarie a buyback expansion is likely.
Energy Market targets reiterated, including a $200-250m cost base reduction of which $110m have been achieved. Strength in oil and gas pricing see Macquarie lift earnings 35% in FY23, while the share buyback drives a 4.6% increase to its FY24 forecast.
The Outperform rating is retained and the target price increases to $6.81 from $6.70.
Sector: Energy.
Target price is $6.81.Current Price is $5.86. Difference: $0.95 – (brackets indicate current price is over target). If ORG meets the Macquarie target it will return approximately 14% (excluding dividends, fees and charges – negative figures indicate an expected loss).
