Woodside shares tumble on Citi downgrade as it trades ex-dividend
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The news: Shares in Woodside Energy tumbled after Citi analysts downgraded the stock, while it traded ex-dividend on Thursday.
The numbers: Shares in Australia’s top oil and gas producer were down nearly 6% to $25.28 in early trading on the ASX.
Part of this was on account of today being the record date for paying the interim dividend of 69 cents a share. This means the share price drops by that amount to reflect the fact that new shareholders are not entitled to this payment.
The context: However, a downgrade by Citi analysts over uncertainty about mergers and acquisitions also weighed on the company’s shares.
Citi downgraded its rating to ‘sell’ from ‘neutral’, and cut its price target on the company’s shares by 2% to $24.50.
The analysts cited a lack of credible upstream growth, a single asset in blue ammonia, and a large Atlantic Basin LNG portfolio as factors suggesting Woodside’s M&A spree will continue as it prepares for the energy transition by 2030, putting pressure on its balance sheet. Woodside last month acquired a clean ammonia project in Texas for USD2.35 billion.
The source: Citi research
