UBS lifts its forecasts for east coast contract gas prices due to few sources for material new gas supply and expects expect medium-term gas demand to remain resilient as coal-fired capacity retires.
Now that Eraring power station is producing back at full capacity, the broker sees Origin Energy as best placed to benefit from rising domestic gas prices. The Buy rating is retained and the target rises to $7.70 from $7.55.
Sector: Utilities.
Target price is $7.50.Current Price is $5.55. Difference: $1.95 – (brackets indicate current price is over target). If ORG meets the UBS target it will return approximately 26% (excluding dividends, fees and charges – negative figures indicate an expected loss).
