Origin Energy Ltd (ASX: ORG)
Origin Energy Limited is an ASX listed energy business engaged in the exploration and production of natural gas, electricity generation, wholesale and retail sale of electricity and gas, and sale of liquefied natural gas in Australia and internationally.
Investment Rationale – SELL at AUD 8.665
- Profit Booking: ORG’s stock price is hovering around its 52-week high and giving a profit booking opportunity.
- Technical Indicator: The momentum oscillator, 14-day RSI is trading at ~62.81 levels, which is approaching the overbought zone.
- Key Risks: ORG’s share price is exposed to economic downturns, supply chain disruptions, decarbonization, and regulatory changes.
- Overvalued Multiples: On a forward 12-month basis, key valuation multiples (EV/Sales, EV/EBITDA, Price/Earnings, Price/Book, and Price/Cash Flow) are higher than the median of the Construction Materials sector.
ORG Daily Chart
(Source: REFINITIV, Analysis by Kalkine Group)
Valuation Methodology: Price/Earnings Approach (FY24E) (Illustrative)
Considering that the resistance level, 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 price of AUD 8.665 (as 25 August 2023, at 11:45 AM AEST).
Note: This report may be updated with details around fundamental and technical analysis, price/ chart in due course, as appropriate.
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 25 August 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.
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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