At a glance, Ampol has delivered a strong fourth quarter trading update thanks to a strong finish from Lytton, outpacing both UBS and consensus forecasts.
UBS says Lytton improved utilisation, positioning it to scoop up strong regional gasoline and diesel margins as demand accelerated.
The broker expects improving consumer sentiment toward travel, despite omicron, augurs well for the company, and expects Australian fuel demand should return to 2019 levels in 2024, suggesting scope for upside surprises.
EPS forecasts rise 1% to 4% across FY21 to FY23 to reflect rising refining margins.
Buy rating retained. Target price rises 2% to $35.
Sector: 0.
Target price is $35.00.Current Price is $31.27. Difference: $3.73 – (brackets indicate current price is over target). If ALD meets the UBS target it will return approximately 11% (excluding dividends, fees and charges – negative figures indicate an expected loss).
