This month is proving to be a good one for the Origin Energy Ltd (ASX: ORG) share price. The energy producer and retailer’s stock has gained a whopping 15% since 1 March.
At that time, it closed at $5.49. But, since then, the Origin share price has gained 89 cents. It finished Friday’s session at $6.38 after hitting a multi-year high in intraday trade.
So, what’s been boosting the S&P/ASX 200 Index (ASX: XJO) energy company’s stock higher? Let’s take a look.
What’s been driving the Origin share price lately?
The Origin share price has been performing well this month. Its strong gains likely led the company’s shareholders to breathe a sigh of relief after the stock’s nail-biting February.
Origin released its earnings for the first half of financial year 2022 in mid-February.
Over the 6-month period, its underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) fell 4.8%, despite its underlying net profit after tax (NPAT) increasing 18%.
That led the company to announce a net after-tax loss of $131 million, an improvement on the prior comparable period’s $183 million loss.
Also within its results, Origin announced its plans to close its Eraring coal-fired power station 7 years early.
The Origin share price recorded a slight gain on the day the company released its half-year earnings. However, the market appeared to reassess the news overnight, as Origin’s stock plunged 8% the following day.
It didn’t manage to regain that loss before the end of last month.
Fortunately, that slip has since been forgotten. The stock won back the loss this month with the help of a new strategy and on-market buyback.
On 9 March, Origin announced it will be undertaking a $250 million on-market share buyback. The buyback will begin next month.
Additionally, the company released its plans to lead the way to decarbonisation while simultaneously cutting costs.
In fact, it’s aiming to reduce its financial year 2018 baseline cash costs by between $200 million and $250 million by financial year 2024.
Another catalyst for Origin’s stock’s recent gains could have been rising energy commodities. Oil and gas prices have been impacted by Russia’s invasion of Ukraine.
Origin share price snapshot
This month’s strong performance has helped the Origin share price to significantly outperform the market in 2022. It has gained 22% year to date.
For comparison, the ASX 200 has slipped 2.4% since the start of 2022.
The energy company’s stock has also gained 35% over the last 12 months. Meanwhile, the ASX 200 has increased 8.8%.
The post The Origin (ASX:ORG) share price has surged 15% since the start of March. Could this be why? appeared first on The Motley Fool Australia.
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More reading
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- ASX 200 (ASX:XJO) midday update: Origin’s $250m buyback, Nickel Mines smashed
Motley Fool contributor Brooke Cooper 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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