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Highlights
- Stock Drop: Shares of Viva Energy fell 1.11% to AU$2.6, reaching their lowest levels since December 24, 2024.
- UBS Adjusts Target: UBS analysts lowered their price target on Viva Energy to AU$3.2, down from AU$3.4, while maintaining a "buy" rating on the stock.
- Weak EBITDA Outlook: Viva Energy projects annual EBITDA from its Convenience and Mobility (C&I) business to fall at the bottom end of its previously stated range, AU$230 million to AU$260 million.
- Refining Margin Pressure: The company reported a refining margin at its Geelong refinery of $6.7 per barrel, which is about 24% lower than the previous year.
Shares of Viva Energy (ASX:VEA) have come under pressure after analysts at UBS reduced their earnings forecasts for the company and lowered their price target. The stock slipped 1.11% to AU$2.6, marking its lowest level since December 2024.
UBS Revises Earnings Estimates and Price Target
UBS adjusted its price target for Viva Energy to AU$3.2, down from AU$3.4, while maintaining a "buy" rating on the stock. This revision follows the company’s weak earnings guidance for the Convenience and Mobility (C&I) business and the refining sector. Viva Energy had previously projected annual EBITDA from its C&I business to fall between AU$230 million and AU$260 million, but it now expects the result to come in closer to the bottom of that range.
Refining Sector Challenges
The company also reported a refining margin of $6.7 per barrel at its Geelong refinery, which represents a 24% decrease compared to the previous year. This drop in margins is a key concern for analysts, as refining outlook for the broader sector remains challenging.
UBS Lowers 2024 and 2025 Earnings Expectations
Reflecting the weak December quarter refining EBITDA and the company’s guidance revision, UBS has cut its 2024 earnings estimate for Viva by 18%. The research firm also reduced its 2025 earnings forecast by 15%, factoring in a softer refining outlook.
