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What analysts are saying about Woodside (ASX:WDS)?
Woodside Energy Group Ltd (ASX: WDS) has experienced significant share price volatility, with its stock dropping by 25% over the past ten months. This sharp decline has left investors questioning whether the next 12 months will bring any improvement for the ASX oil and gas giant.
Company Outlook for FY24 and FY25
While the Australian tax year is ending, Woodside operates on a calendar financial year, meaning it still has six months left in its 2024 financial year. The company has provided guidance for its production and capital expenditure, expecting to produce between 185 million and 195 million barrels of oil equivalent (MMboe) in 2024. The full production figures will be revealed in January 2025, during the company's fourth-quarter update. The amount produced and the prices received will be crucial determinants for Woodside’s share performance.
Woodside also projects capital expenditure between AU$5 billion and AU$5.5 billion in 2024, indicating substantial ongoing investment in its operations and growth projects.
Major Growth Projects
Woodside is actively working on three major growth projects. Commissioning activities at the Sangomar project in Senegal have been ongoing for several months, with the company on track to achieve its first oil production by mid-2024. Meanwhile, the Scarborough and Pluto Train 2 projects were 62% complete by the end of the first quarter of 2024, with the first LNG cargo expected in 2026.
Analyst Predictions for Woodside Shares
UBS, a notable broker, released an optimistic note in April, highlighting strong demand for LNG in North Asia. However, UBS also warned of a potential global LNG surplus from 2027 onwards, which could exert downward pressure on pricing for new sales and purchase agreements. This situation underscores the need for accelerated LNG marketing activities.
UBS forecasts Woodside’s FY24 performance as follows:
- Revenue: US$12.36 billion
- Earnings before interest and tax (EBIT): US$4.2 billion
- Net profit after tax (NPAT): US$2.34 billion
- Annual dividend per share: 98 cents
- Net debt by year-end: US$2.7 billion
For FY25, UBS expects modest improvements:
- Revenue: US$12.9 billion
- EBIT: US$4.27 billion
- Net profit: US$2.48 billion
- Annual dividend per share: US$1.05
Woodside Share Price Snapshot
As of now, Woodside's share price has decreased by approximately 10% since the beginning of 2024. Investors and analysts alike will be closely watching the company's upcoming performance updates and strategic moves to determine if a rebound is on the horizon.
