Woodside Energy Group Limited

Section 1: Company Overview and Fundamentals Insights

1.1 Company Overview

Woodside Energy Group Limited (ASX: WDS) is an independent oil and gas company that explores, develops, produces, and supplies energy. It explores and produces oil and gas from a portfolio of facilities associated with major oil and gas companies.

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

1.3 Top 10 Shareholders: The top 10 shareholders together form ~23.27% of the total shareholding. The Vanguard Group, Inc. and BlackRock Institutional Trust Company, N.A. are holding a maximum stake in the company at ~5.27% and ~5.18%, respectively.

1.4 Key Metrics: The company reported an improvement in net margin in FY22 to 39.1% compared to 29.2% in FY21. Further, the return on equity increased to 26.1% in FY22 compared to 15.5% in FY21. Below is captured the trend of the gross margin and EBITDA margin:

Section 2: Business Updates, Financial and Operational Highlights

2.1 Recent Updates:

2.2 Results Highlights of FY22: During FY22, the company reported an EBITDA growth of 172% YoY to USD 11,234mn as compared to USD 4,135mn in FY21. Further, the liquidity in the company also improved on a YoY basis to USD 10,239mn in FY22 as compared to USD 6,125mn in FY21. 

2.3 Progressive Strategy: The company made progress during FY22 towards its growth projects, such as Seven wells among the planned 23 wells completed at Sangomar Field Development Phase 1 offshore Senegal. Further, in FY23, the company expects to complete subsea installation and relocate the floating production storage and offloading facility from Singapore.

2.4 Dividend History: The company declared a final dividend of US 144 cents per share (cps), bringing the full-year fully franked dividend to US 253 cps. The dividend paid by the company is based on the underlying NPAT of USD 5,230mn and the full-year shareholder distribution is USD 4,804mn.

Section 3: Key Risks and Outlook:

Section 4: Stock Recommendation Summary

4.1 Price Performance and Technical Summary

The stock has witnessed a rise of ~2.02% in 3 months and over the last 6 months, it increased by ~11.71%. The stock has a 52-week low and 52-week high of AUD 28.50 and AUD 39.580, respectively and is currently trading slightly above the average of a 52-week high-low average.

4.2 Fundamental Valuation

Valuation Methodology: EV/Sales 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 2 March 2023. 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.

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.

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