The Beach Energy Ltd (ASX: BPT) share price has been a relatively positive performer today.
The energy company’s shares are currently trading a fraction higher at $1.37.
This compares to a 1% decline by the S&P/ASX 200 Index (ASX: XJO) this afternoon.
Why is the Beach share price outperforming?
The Beach share price appears to be faring better than others today due to a number of positive broker notes.
One of those came from the team at Bell Potter. This morning the broker retained its buy rating and lifted its price target on the company’s shares to $1.62.
Based on the current Beach share price, this implies potential upside of 18% over the next 12 months.
The broker is also forecasting a 1.5% dividend yield, bringing the total potential return to almost 20%.
What did the broker say?
According to the note, the broker was pleased with Beach’s investor update and its plan to increase its production to 28 MMboe by FY 2024. This represents a 27% increase on the midpoint of its FY 2022 guidance.
Bell Potter commented: “BPT has a strong, fully funded energy production growth outlook. This production growth is diversified across five energy basins and across four separate gas markets, including the global LNG trade. The company should benefit from tightening east coast gas markets and international LNG markets flowing through to higher realised prices. BPT is trading at materially lower earnings multiples compared with its ASX-listed peers.”
The broker also suspects that Beach may outperform its targets. It has pencilled in production of 29.5 MMboe in FY 2024.
It explained: “We are forecasting production of 29.5MMboe in FY24. This forecast assumes production at the Cooper Basin Joint Venture, BassGas and Kupe to remain steady, Western Flank to decline to 4MMboe per year, successful ramp-up to near nameplate capacity at the Victorian Otway to 7.3MMboe per year and an expansion in production at the Perth Basin assets to 5.2MMboe per year.”
All in all, the broker feels this makes the Beach share price good value at the current level.
Should you invest $1,000 in Beach right now?
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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