This report is an updated version of the report published on 11 September 2023 at 3:58 PM AEST.
Ampol Limited (ASX: ALD)
Ampol Limited (ASX: ALD) is involved in purchasing, refining, distributing, and marketing petroleum products in Australia, New Zealand, Singapore, and the United States of America.
Recommendation Rationale – SELL at AUD 34.620
- Financial Decline: During H1 FY23, ALD a 9% decline in Group Replacement Cost Operating Profit (RCOP) EBITDA YoY. Moreover, the net borrowings on 30 June 2023 also increased to AU$2,380 million from AU$2,359 million on 31 December 2022.
- Emerging Risks: The macroeconomic headwinds, significant deterioration in consumer confidence, and rise in finance costs could impact the share prices.
- Technical Indicator: The momentum oscillator, 14-day RSI is trading ~62.12 levels, approaching the overbought zone. Thus, the stock price can face correction in the short term.
- Overvalued Multiples: On a forward 12-month basis, key valuation multiples (EV/EBITDA, Price/Earnings, Price/Book, and Price/Cash Flow) are higher than the median of the Energy sector.
ALD’s Daily Chart
Valuation Methodology: Price/Earnings Approach (FY24E) (Illustrative)
Considering the volatile market sentiments, current trading levels and risks associated, it is prudent to book profit at the current levels. Hence, a 'Sell' rating is given on the stock at the current market price of AUD 34.620 (as on 11 September 2023, at 12:38 PM AEST).
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical issues prevailing geopolitical tensions. 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 12 September 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.
Note 4: Dividend Yield may vary as per the stock price movement.
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