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This report is an updated version of the report published on the 3 April 2024 at 2:30 PM AEDT.
Karoon Energy Limited (ASX: KAR)
Karoon Energy Limited (ASX: KAR) operates as an oil and gas exploration and production company in Australia, the United States of America, and Brazil.
Recommendation Rationale – SELL at AUD 2.260
KAR Daily Chart
Valuation Methodology: Price/Earnings Approach (FY June'25E) (Illustrative)
Given the risk associated with fluctuation in oil prices, commodity price fluctuation, geopolitical risks, weather, climate change risks, etc, the stock might trade at some discount to its peers. For valuation, few peers like Beach Energy Ltd (ASX: BPT), Santos Ltd (ASX: STO), and Australis Oil & Gas Ltd (ASX: ATS) have been considered. Considering that the stock is trading near to its R2 level, downside as indicated by the valuation, current trading levels, rally in share price movement and risks associated, it is prudent to book profits at the current levels. Hence, a ‘Sell’ recommendation is given on the stock at the current price of AUD 2.260 (as of April 3, 2024, at 10:15 AM AEDT).
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 April 3, 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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