Tag: ASX:ORG

Origin Energy is under Algo Engine sell conditions, however, we see value emerging from a  fundamental analysis perspective. This should lead to a switch in the algo model from sell to buy in the near future.

The key positive is the strong cash generation from the APLNG project, which has led to the de-gearing of the company balance sheet. The next key driver will be the reinstatement  of the dividend policy which will have the stock trading on a forward yield of 4.5%.

We expect the future dividend payments to steadily increase, which will help support the share price.

Origin Energy is under Algo Engine sell conditions, however, we’ve been expecting stronger earnings to support another leg in the share price rally.

ORG reported its 1H19  with EBITDA of $1.73bn, which is ahead of market consensus. The dividend was reinstated at $0.10 per share.

We see the balance sheet improving which will lead to ongoing increases in the dividend. Based on FY20 earnings we have ORG now trading on a 5.5% yield.

We’re sellers “short term” on a push above $8.00 in ORG.

We recommend investors begin accumulating Origin Energy at current levels.

The company will reinstate their dividend in February and the current sell-off will likely prove to be a substantial low.

Origin

We recommend accumulating Origin on the current share price pullback

Buy zone $7.50 – $8.00.

We will update the initial upside target in a future posting once the stock re-establishes upside momentum.

Origin Energy

Origin Energy has sold off due to a  slightly lower earnings and the ACCC intervening into retail electricity pricing.

At $8.00, ORG looks compelling value and we recommend accumulating the stock within the $7.50 – $8.50 range.

Origin Energy

Origin continues to form “higher high and higher low” price structures and remains one of the best performing stocks in our model portfolio.

The recent 4Q production report helps support the earnings recovery and we feel the share price trades within the $9.50 – $10.50 range.

4Q18 revenue of A$570 million was ahead of consensus with higher volumes and higher realized domestic LNG prices.

FY18 revenue is forecast at $15 billion, EBITDA $3 billion, EBIT $1.5 billion generating EPS of $0.55 per share.

In FY19 we expect earnings to grow by 20% and the company to payout 50% in dividends, placing the stock on a 3% forward yield.

In FY20, both increasing profit and payout ratio will then lift the dividend to $0.60 per share placing ORG on a FY20 yield of 5.5%.

Origin Energy

The uptrend in the Origin share price is well established and the stock now trades near full value.

We continue our buy-side interest, although we recognize a period of consolidation over the next 6 months is likely.

At the upcoming earnings result, we’ll be looking for commentary from the company on reinstating dividends and progress on the debt reduction program.

Origin is a recommended buy-write strategy within the ASX Top 50 model portfolio.

Consensus earnings forecasts are looking for 23% EPS growth supported by higher energy prices and ramp up of LNG revenue.