UBS sees potential tailwinds for Australia's Viva Energy, raises PT

Waypoint REIT

20/01/2023 02:58

** Brokerage UBS says Australia's Viva Energy  VEA.AX 
remains its preferred company for the retail refining sector due
to expectation of continued volume and retail margin growth from
penetration through its retail network
    ** The fuel retailer had reported higher refining margin
from its Geelong refinery in Dec qtr  urn:newsml:reuters.com:*:nL4N34405M 
    ** However, it flags a miss in sales volume for the quarter
due to slower recovery in the company's retail network; adds
that it remains to be seen if decline is temporary
    ** The broker lifts its FY23 earning per share forecast by
26%, while expecting refining margins to remain resilient in
2023 as diesel and jet fuel spreads are expected to remain
elevated 
    ** Brokerage retains "Buy" rating on stock, raises price
target to A$3.45 per share from A$3.40 
    ** Seven of 11 analysts rate the stock "buy" or higher, four
"hold" and none "sell" or lower; their median PT is A$3.25–
Refinitiv data
    ** Stock rose 16.2% in 2022
 (Reporting by Archishma Iyer in Bengaluru)
 ((Archishma.Iyer@thomsonreuters.com;))