Total capex for the development of Scarborough & Pluto T2 has increased 5% to $12.0bn, largely in-line with UBS’ expectation. The broker’s Buy rating and $26.10 target is maintained, as the company trades with an implied oil price of $54/bbl versus spot of $72/bbl.
The analyst believes the company could re-rate following the appointment of a permanent CEO and successful sell-down of Scarborough and Pluto T2.
A formal process has commenced to sell down Scarborough to around 60% from 73.5%, and Pluto T2 to 50% from 100%.
Sector: Energy.
Target price is $26.10.Current Price is $21.82. Difference: $4.28 – (brackets indicate current price is over target). If WPL meets the UBS target it will return approximately 16% (excluding dividends, fees and charges – negative figures indicate an expected loss).
