The company reported an improved gross refining margin in March of US$6.50 a barrel. Crude intake was also higher in March. Morgans notes the rise in oil prices has hurt retail fuel margins.
The broker trims 2019 refining estimates on a combination of higher assumed energy costs and a lower first half refining margin.
Morgans envisages smaller incremental gains for the company following the re-cutting of the Coles ((COL)) alliance, which provided the majority of gains in the March quarter. Add rating maintained. Target reduced to $2.57 from $2.70.
Sector: Energy.
Target price is $2.57.Current Price is $2.28. Difference: $0.29 – (brackets indicate current price is over target). If VEA meets the Morgans target it will return approximately 11% (excluding dividends, fees and charges – negative figures indicate an expected loss).
