Mid-Cap

One Energy Stock Posted a Production and Sales Decline - BPT

January 04, 2024 | Team Kalkine
One Energy Stock Posted a Production and Sales Decline - BPT

BPT:ASX
Investment Type
Mid - Cap
Risk Level
Action
Rec. Price (AU$)

This report is an updated version of the report published on 4 January 2023 at 4:47 PM AEDT.

Beach Energy Ltd (ASX: BPT)

Beach Energy Ltd (ASX: BPT) is an Australia-based oil and gas exploration and production entity. Founded in 1961, Beach today has oil and gas production in five basins across Australia and New Zealand.

Recommendation Rationale SELL at AUD 1.633

  • Profit Booking: BPT’s share prices have surged over 11% in the past one month and offered a profit booking opportunity.
  • Financial Decline: During FY23, production and underlying EBITDA fell by 11% and 12% YoY, respectively.
  • Technical Indicator: The momentum oscillator 14-Day RSI (~61.27) is approaching the overbought zone; and thus, prices can face correction in the short term.
  • Increased Debt: The Company turned from net cash of AU$165 million in FY22 to a net debt of AU$166 million in FY23.

BPT Daily Chart

Daily Technical Chart; Source: REFINITIV

Valuation Methodology: Price/Earnings Approach (FY June'24E) (Illustrative)

Given its current trading levels, recent rally in the share price, and risks associated, it is prudent to book profit at the current levels. Hence, a ‘Sell’ recommendation is given on the stock at the current market price of AUD 1.633, at 3:00 PM AEDT, as of 4 January 2024.

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 4 January 2024. 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 downtrend may take a pause backed by demand or buying interest.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: In general, it is a level to protect further losses in case of any unfavourable movement in the stock prices.



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