The latest Market Talks covering Energy and Utilities. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.
0319 GMT - Whether Worley continues to grow strongly isn't immediately clear after the engineering company--for its investor day--provided data on its factored sales pipeline to March but on its backlog only to February, says Citi analyst James Byrne. Headcount also appears flat, he says. Other disclosure suggests a bullish outlook remains intact, he says but adds that Worley's investor-day presentation is missing some granular detail. "Today's pack is helpful to conceptualize" planned growth in revenue and operating leverage, "but perhaps lacking on the information required to quantify it," he says. Worley is down 1.9% at A$15.07/share. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)
0303 GMT - Sinopec faces margin pressure in the downstream refined oil and chemical business, CCB International analyst Helen Lau writes in a research note. Sinopec reported weaker-than-expected 1Q earnings, with price weakness in its chemical products hurting operating profit and weighing on the overall earnings result, says Lau. CCB lowers its earnings forecasts for the next two years on Sinopec's disappointing 1Q results, its conservative guidance for its oil and gas production for 2024 and the concerns regarding margin pressures. It downgrades the stock's rating to neutral from outperform and lowers the target price to HK$5.00 from HK$5.50. Shares are 1.4% lower at HK$5.05. (kimberley.kao@wsj.com)
0210 GMT - Dialog Group's downstream business may turn profitable in its fiscal 2H, Hong Leong IB analyst Brian Chin says in a note. He attributes this to the coming expiration of its five-year master service agreement with Petronas, which is expected to be renewed at higher rates. Tank storage rates and occupancy are expected to remain stable, supported by heightened geopolitical tensions and concerns about energy security, he says. Chin raises FY 2024, FY 2025 and FY 2026 earnings forecasts for Dialog by 3%, 3% and 4% respectively, on higher expected storage rates, among other factors. Hong Leong raises the target price to MYR2.77 from MYR2.66 and keeps a buy rating on the stock. Shares are 0.8% higher at MYR2.50. (yingxian.wong@wsj.com)
0127 GMT - Cnooc will likely record strong earnings for the next two years, CCB International analyst Helen Lau writes in a research note. Cnooc reported the strongest growth in revenue and net profit in 1Q compared to Sinopec and PetroChina, Lau says. Given its net cash position and low dept-to-capital ratio, Cnooc will likely report strong free cashflow this year, supporting its high dividend payout, Lau adds. Citing the rise in oil production, sales and effective cost control reported in 1Q, CCB International keeps its outperform rating, and raises its target price to HK$22.00 from HK$21.30 to reflect an upward revision in earnings forecast for this and next year. Shares were 0.5% lower at HK$19.90 in preopen trade. (kimberley.kao@wsj.com)
0123 GMT - Dialog Group's earnings appear to be on an upward trend, supported by higher occupancy rates at its terminals and improved upstream segment's performance, particularly in production, Kenanga IB analyst Lim Sin Kiat says in a note. The Malaysian energy-services provider has also benefited from reduced cost pressures, he says. The completion of high cost legacy engineering, procurement, construction, and commissioning contracts could lead to improved margins in the coming quarters, he reckons. Lim raises Dialog's FY 2024-FY 2025 earnings estimates by 10% and 3%, respectively, and increases target price to MYR3.18 from MYR3.10 with an unchanged outperform rating on the stock. Shares are 2.4% higher at MYR2.54. (yingxian.wong@wsj.com)
0012 GMT - Oil edges higher in the early morning Asian session. OPEC+ and the International Energy Agency will update their views on oil markets this week with their monthly reports, says Commonwealth Bank analyst Vivek Dhar in a research note. The IEA's report from last month showed global oil demand is expected to grow 1.2% in 2024, before slowing slightly to 1.1% in 2025, Dhar notes. Front-month WTI crude oil futures are up 0.1% at $79.23/bbl; front-month Brent crude oil futures are 0.2% higher at $83.49/bbl. (ronnie.harui@wsj.com)
1518 GMT - Algonquin Power's new CEO adds more clarity to a company with mounting expectations, especially regarding the sale of its alternative energy business. CIBC's Mark Jarvi says in a report that Huskilson's appointment as permanent CEO is a step in the right direction. Jarvi says that with the CEO position cemented the "growing expectations of an announcement on the renewable business sale within the next three months, as well as a potential sale of AQN's AY stake, could bring more clarity, simplicity and stability." He says that Huskilson will "continue on the path ahead and provides a calming, experienced person to lead AQN through its transition phase." (adriano.marchese@wsj.com)
1309 GMT - Emera had a soft start to the year in but TD Cowen's Linda Ezergailis says the company is still on track for growth in the long term. In a report, Ezergailis notes that adjusted EPS of C$0.76 missed TD estimates of C$1.02, the recent consensus of C$0.97, and below last year's 1Q of C$0.99 as most segments underpeformed. The analyst says that while 1Q came in below expectations, over the long-term, growth "is driven by continued investment in reducing the carbon intensity of its portfolio through decarbonization initiatives, renewable energy, and battery storage investments." (adriano.marchese@wsj.com)
(END) Dow Jones Newswires
May 14, 2024 04:20 ET (08:20 GMT)
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