Beach Energy extends losses with analysts mixed on HY result
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The news: Beach Energy shares tumbled for the second successive session, after the oil and gas explorer's first-half result drew a mixed response from analysts.
The numbers: Beach shares were down 6.4% to $1.35 by 11:30am AEDT, making it the worst performing ASX 200 stock. Beach shares shed 5% on Thursday after narrowing its full-year production guidance despite output climbing during the first half.
Morgans, Citi and Macquarie made the following downgrades to the stock:
- Morgans downgraded its rating from 'add' to 'hold' and cut its price target from $1.75 to $1.55;
- Citi retained its 'sell' rating and cut its target price from $1.30 to $1.15; and
- Macquarie retained its 'neutral' rating and cut its price target 3.4% to $1.40.
Meanwhile, Bell Potter reiterated its 'buy' rating and raised its price target from $1.65 to $1.70.
Morgan Stanley kept its 'underweight' rating and $1.46 price target, while UBS kept its 'buy' rating and $1.60 price target.
The context: Morgans called Beach's first-half trading update "somewhat disappointing", marked by continued troubles at its Waitsia gas plant in Western Australia. The narrowed production guidance could trigger consensus downgrades, the analysts noted.
However, Bell Potter analyst Stuart Howe said that Beach's production growth will see earnings and free cash flow lift from FY26, with the company's near-term production growth a "key differentiator" when compared with its domestic peers.
The sources: Citi research, Morgans research, Morgan Stanley research, Bell Potter research, Macquarie research, UBS research
