A list of broker sentiments on the stock may give some insight into why the continued bounce back. Not that I trust Brokers, however many investors rely on their sentiment heavily to make decisions. An attractive percieved 16% ave target return is probably aiding the support. Bad production news or erosion of the Oil price supports are more likely erode sentiment in my opinion and thus a Broker Re-rate. Note JP Morgan are the only ones that are short the stock.
Information Source: FN Arena
WPL - WOODSIDE PETROLEUM LIMITED
Previous Closing Price $36.13
Average Target Price $42.21 16.8% upside
Sentiment Indicator(1 = Highest Rating, -1 = Lowest Rating) 0.6
Recommendation Overview
Broker Date Rating Recommendation Target Price % to Reach Target
Aspect Huntley 05-Jan-07 3 Hold - -
Update database.
Credit Suisse 01-Dec-06 1 Outperform $45.00 24.6%
Target $45.00 (was $49.00). The broker has cut its oil price forecasts, resulting in changes to its earnings estimates for the company. In 2007 and 2008 its profit forecasts are down 4% to $1,815m and $3,102m.
UBS 22-Nov-06 1 Buy 1 $44.64 23.6%
The broker notes the company's exploration program for 2007 offers significant potential, with Libya in particular representing upside of as much as $4.00 per share if drilling produces positive results. The broker continues to see the stock as offering long-term value. Valuation is $30.67.
SB Citigroup 20-Nov-06 1 Upgrade to Buy from Hold, Medium Risk $43.00 19.0%
Target $43.00 (was $43.20). The broker notes given its recent changes to forecasts the latest update on production has meant only minor changes to estimates. The upgrade in its rating follows recent price weakness, while it continues to see value in the stock longer-term.
Merrill Lynch 17-Nov-06 3 Neutral, Low Risk - -
The broker has been waiting for production downgrades, and got them. Problems at Chinguetti, for one, have been known for some time. The broker has reduced earnings by 5%, 21% and 13% in 2006-08. LNG rollover pricing looks more optimistic however, but the broker warns a premium for growth is built into the WPL price that may be under threat given the production problems in oil.
JP Morgan 17-Nov-06 3 Neutral $35.50 - 1.7%
Production downgrades dropped production to levels even below the broker's low-marker forecasts. This results in a 4% drop in valuation. Target falls from $37.00 to $35.50.
ABN Amro 17-Nov-06 3 Hold $37.80 4.6%
Target $37.80 (was $39.00) The broker notes the company's investor day confirmed downgrades to production in 2006 and 2007 and reserves at Chinguetti and Enfield. It also notes production guidance for FY08 now appears too high, so the overall impact is a cut in forecasts, with earnings in 2006 down 5% to $1,397.3m and 2007 by 20% to $1,651m.
Macquarie 17-Nov-06 1 Outperform $42.50 17.6%
Target falls from $47.50 to $42.50 on production downgrades. The broker notes WPL was already trading at a decent premium to valuation, and that this last downgrade might hurt market sentiment in the short term. However, the broker believes in the bigger picture, and is retaining Outperform.
Deutsche Bank 17-Nov-06 1 Buy $47.00 30.1%
Don't panic, says the broker. Yes - the production downgrades are a disappointment, but not the end of the world. On a longer term view, WPL's attraction lies in the global LNG "mega-trend". The broker has reduced 2007 earnings by 21.5%. Target falls from $48.20 to $47.00. But, given above, the broker suggests WPL is "still a BUY".