UBS Bullish on Origin Energy's (ASX: ORG) Growth Potential Despite Market Response

1 min read | July 01, 2024 01:56 PM AEST | By Team Kalkine Media

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UBS Bullish on Origin Energy's (ASX: ORG) Growth Potential Despite Market Response — Image source: Avigator Fortuner

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Analysts at UBS have expressed bullish sentiments regarding Origin Energy (ASX: ORG), believing that the market currently undervalues the company's peaking generation portfolio and its stake in Octopus Energy.

Analyst Upgrade and Market Reaction

UBS has significantly raised its price target for Origin Energy, increasing it to AU$12.10 per share from AU$10.55 previously, while maintaining a 'buy' rating. Despite this positive outlook, shares of the energy giant experienced a modest decline of up to 1.1% in early trading.

Untapped Growth Opportunities

UBS highlighted potential growth drivers for Origin Energy, particularly noting the underestimation by government forecasts of 3-5GW of new electricity demand from data centers and artificial intelligence by 2030. This oversight presents additional upside potential for Origin's earnings, positioning the company favourably in the evolving energy landscape.

Analyst Consensus and Market Sentiment

According to LSEG data, analyst opinions on Origin Energy are divided, but generally optimistic. Six out of eleven analysts rate the stock as a 'buy' or higher, with the remaining five recommending a 'hold'. The median price target stands at AU$10.70, indicating a mixed but positive sentiment among analysts. Origin Energy has demonstrated strong performance year-to-date, with its stock rising by 28.2% as of the last trading session.

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