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Section 1: Company Overview and Fundamentals
1.1 Company Overview:
Beach Energy Limited (ASX: BPT) is an Australia-based oil and gas exploration and production company. The Company currently holds oil and gas production in five basins across Australia and New Zealand. With its Otway Gas Plant and the Lang Lang Gas Plant in Victoria, BPT is a key supplier to Australia’s East Coast gas market, suppling around 12% of the gas on the East Coast of Australia.
1.2 The Key Positives, Negatives, Investment Highlights and Risks
1.3 Top 10 Shareholders: The top 10 shareholders have been highlighted in the chart below, which together forms ~45.20% of the total shareholding.
1.4 Key Metrics:
BPT has reported growth in earnings and cash flows in FY22 supported by higher demand and pricing for its products, which offset the impact of lower production. Total revenue during the period rose 13% to AUD1.8 billion and underlying earnings before interest, tax, depreciation and amortisation grew by 17% to AUD1.1 billion. Further, the company has reported an uptick in EBITDA margin to reach 62.0% in FY22 from 61.7% in FY21. The company has also reported a healthy improvement in ROE to 15.1% in FY22 from 10.7% in FY21.
Section 2: Business Updates and Financial Highlights
2.1 Recent Updates:
2.2 Insights of FY22:
Section 3: Key Risks and Outlook:
Section 4: Stock Recommendation Summary:
4.1 Price Performance and Technical Summary:
4.2 Fundamental Valuation
Valuation Methodology: Price/Earnings Per Share Multiple Based Relative Valuation (Illustrative)
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.
Note 1: Past performance is neither an indicator nor a guarantee of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is January 25, 2023. The reference data in this report has been partly sourced from REFINITIV.
Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.
Technical Indicators Defined: -
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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