Beach Energy shares extend gains as UBS, Bell Potter lift price targets
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The news: Beach Energy continued its recent rally on the ASX after UBS and Bell Potter upgraded their price targets on the oil and gas producer, after it reported a growth in sales and revenue during the December quarter.
The numbers: Beach shares were up 1.7% to $1.51 by 2:30pm AEDT, extending gains of more than 10% over the last month.
Among analysts:
- UBS raised its price target from $1.55 to $1.60;
- Bell Potter lifted its price target from $1.50 to $1.65; and
- Morgan Stanley kept its price target of $1.46.
UBS and Bell Potter remained 'buy' rated on Beach, with Morgan Stanley 'underweight' on the stock.
The context: UBS and Bell Potter were both optimistic after Beach posted its quarterly result on Wednesday. UBS said it expects stronger-than-expected free cash flow from FY26 due to rising realised gas pricing from uncontracted East coast gas volumes, selling into an increasingly tight East coast market.
Bell Potter analyst Stuart Howe noted that Beach's near-term production growth is a key differentiator when compared with domestic peers. Capital expenditure is also trending lower, he said, while production growth will see earnings and free cash flow lift from next financial year.
The sources: UBS research, Morgan Stanley research, Bell Potter research
