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Highlights

  • Origin Energy surged 7.4% to a 10-year high of AUD 11.58 during Friday's trading session.

  • Jefferies rated ORG a BUY with a target price of AUD 12.05, suggesting a further 5.24% upside from current levels.

  • FY25 Energy Markets EBITDA guidance was raised to AUD 1.3–1.4 billion on the back of its operations, favourable markets, and lower compliance costs.

Origin Energy Ltd (ASX:ORG) surged to a 10-year high on Friday, emerging as the top performer in the utilities sector and the fifth-best stock on the ASX 200. Shares in the energy giant jumped 7.4% to touch AUD 11.58 during the trading session, buoyed by a mix of bullish analyst sentiment, favourable FY25 guidance, and a rally in energy commodity prices amid escalating geopolitical tensions in the Middle East.

Analyst sentiment has turned increasingly optimistic for Origin, with Jefferies recently issuing a BUY recommendation. Analyst Amit Kanwatia from Jefferies set a target price of AUD 12.05, representing a 5.24% upside from current levels.

Driving the stock’s rally on Friday was a surge in Brent crude futures, which soared as high as USD 76 per barrel following reports of Israeli military strikes on Iran. The spike in oil prices sparked broad gains in energy stocks, pushing the ASX 200 energy index higher, with Origin leading the charge.

But the rally wasn't just macro-driven. Origin released updated guidance for FY25, which significantly boosted investor confidence. The company now expects its Energy Markets Underlying EBITDA to be in the range of AUD 1.3 to 1.4 billion, a notable uplift from the prior forecast of AUD 1.1 to 1.4 billion. The upward revision was attributed to a combination of generation performance, robust electricity volumes, and favourable wholesale market conditions. Lower green certificate costs also contributed to the improved profitability outlook.

Meanwhile, the company revised its expectations for its UK-based investment in Octopus Energy. Origin now forecasts a loss of up to AUD 100 million from its share of Octopus' FY25 EBITDA, contrasting with previous projections of a break-even or profitable contribution. This revision stems from an unseasonably warm March and April in the UK—the third warmest April since 1884—leading to reduced energy consumption and a $50 million hit to earnings. Additionally, one-off factors related to the UK government’s energy crisis subsidy program further pressured forecasts.