Beach Energy climbs as Morningstar calls stock 'materially undervalued'
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The news: Beach Energy rallied after two sessions of successive declines on the ASX, as Morningstar called the oil and gas explorer's stock "materially undervalued".
The numbers: Beach shares were up 3.7% to $1.42 by 12:30pm AEDT, having shed around 5% in each of the previous sessions following the release of its first-half result on Thursday.
Morningstar reiterated its fair value estimate of $2.55.
The context: Morningstar analyst Mark Taylor said the market is "unduly concerned by limits to reserve life and perceived sustaining capital requirements".
He sees Beach well placed to build upon "imminent cash flows" at its Waitsia gas plant in Western Australia, with production levels set to rise at the site, and capital outlays "likely in decline".
The source: Morningstar research
