What’s Behind the Drop in These Energy Stocks Today?

2 min read | January 15, 2025 08:46 PM EST | By Team Kalkine Media

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What’s Behind the Drop in These Energy Stocks Today? — Image source: © Poringdown | Megapixl.com

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Highlights

S&P/ASX 200 up 1.5% to 8,341.4 points, marking a strong session.

Origin Energy shares fall 1% after Goldman Sachs downgrades the stock.

Vulcan Energy sees a 2.5% drop amid potential profit-taking despite strong gains over the past year.

The S&P/ASX 200 Index (ASX:XJO) is having an impressive day on Thursday, rising 1.5% to 8,341.4 points, buoyed by strong market sentiment across various sectors. However, not all ASX shares are following the broader market's upward momentum. Two notable exceptions are Origin Energy Ltd (ASX:ORG) and Vulcan Energy Resources Ltd (ASX:VUL), whose shares are experiencing declines today.

Origin Energy Faces Downgrade from Goldman Sachs

Origin Energy's share price is down 1% to AU$11.10, following a downgrade from Goldman Sachs. The investment bank revised its recommendation for the energy giant from "buy" to "neutral," while slightly increasing its price target to AU$10.40. Goldman Sachs stated that it believes the stock is now fully valued after recent strong performance, and warned of the risk for negative consensus valuation revisions. This concern stems from higher cash tax payments expected in FY25, which could weigh on the company’s financials and future outlook. The downgrade has weighed on investor sentiment, contributing to the dip in Origin Energy’s share price.

Vulcan Energy Faces Profit-Taking Amidst Strong 2024 Gains

Meanwhile, Vulcan Energy's share price is down 2.5% to AU$6.05, despite no specific news or announcements from the company today. Vulcan Energy has been one of the standout performers in the lithium sector over the past year, with its shares up more than 180% from this time last year. The drop in share price could be attributed to some profit-taking, as investors capitalize on the impressive gains seen by the lithium developer. Despite the dip, Vulcan Energy’s prospects remain strong, with ongoing excitement surrounding its lithium operations in Europe. The company’s innovative approach to sustainable lithium extraction continues to generate optimism among investors, although market conditions and stock volatility are playing a role in the short-term pullback.

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