Beach Energy Limited

Section 1: Company Overview and Fundamentals Insights

1.1 Company Overview: Beach Energy Limited is an Australian-based oil and gas exploration and production company with a diverse portfolio of assets across Australia and New Zealand. Beach Energy's core business involves both operated and non-operated assets, producing natural gas, LPG, condensate, and crude oil. The company is a key supplier of gas to Australia's domestic markets and exports LNG through long-term contracts. Kalkine’s Resources Report covers the Investment Highlights, Management Insights, Key Financial Metrics, Risks, Technical Analysis along with the Valuation, Target Price, and Recommendation on the stock.

1.2 The Key Positives, Negatives, Investment Highlights, and Risks

1.3 Top 10 Shareholders:

The top 10 shareholders together form ~48.26% of the total shareholding. Seven Group Holdings Limited and Equity Trustees Limited hold maximum stakes in the company at 30.02% and 4.33%, respectively.

1.4 Key Metrics: Over the past five years, Beach Energy has experienced both growth and challenges, supported by strategic investments in core projects and disciplined cost management. The Company’s ability to navigate volatile markets, increase production capacity, and commit to decarbonization initiatives positions it well for future growth, though production and operational challenges have impacted recent results. Below is captured some key metrics:

Section 2: Business Updates, Financial and Operational Highlights

2.1 Recent Business Updates:

2.2 Financial Highlights: Below mentioned are some key financial highlights:   

2.3 Historical Financial Trend

Section 3: Key Risks and Outlook:

Section 4: Stock Recommendation Summary

4.1 Price Performance and Technical Summary

The stock has gained over 16% in the last 1 month, whereas over the last 6 months, the stock has corrected by around 23%. The stock has a 52-week low and 52-week high of AUD 1.065 and AUD 1.925, respectively, and is currently trading close to its 52-week low level.  

 (Source: REFINITIV; Analysis by Kalkine Group)

4.2 Fundamental Valuation

Valuation Methodology: Price/Cash Flow Multiple Based Relative Valuation (Illustrative)

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 9 October 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Dividend Yield may vary as per the stock price movement. 

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.