Retail churn among energy providers has spiked, Macquarie notes, with tier 1 retailers the likely beneficiary, but growth in customers adds value but not earnings as Origin Energy’s hedge position is challenged with NSW with coal prices not yet finalised.
Visibility in energy markets near term earnings outlook is low, the broker notes, albeit pains in electricity are reduced by gas.
Sustained high prices at APLNG delivers Origin the flexibility to grow in renewables/batteries without the balance sheet stress. Medium
term Macquarie expecst earnings in energy markets will normalise as the energy transition progresses and wholesale pricing stabilises.
Outperform retained, target falls to $6.87 from $7.08 on forex adjustments.
Sector: Utilities.
Target price is $6.87.Current Price is $5.57. Difference: $1.30 – (brackets indicate current price is over target). If ORG meets the Macquarie target it will return approximately 19% (excluding dividends, fees and charges – negative figures indicate an expected loss).
