Morgan Stanley rates KAR as Equal-weight

Published: 2025-07-06 20:31:07 ET MS

Published on 07/06/2025 at 20:31

Morgan Stanley marked-to-market June quarter forecasts for energy companies and following revisions to oil and gas forecasts, and AUD/USD exchange rate. The broker lifted Brent oil price forecast by 4-6% until the March 2027 quarter, before lowering the forecast for June 2027 quarter by -7%.

The Henry Hub natural gas price forecast was lowered until the March 2026 quarter and upgraded by 1-4% thereafter, while JKM LNG price forecasts were mixed in the near term, before 9% increases later.

The AUD/USD exchange rate forecast was lifted by 3% for the September and December quarters, and left unchanged after that.

For Karoon Energy, the marked-to-market resulted in a 12% increase to the FY25 EPS forecast and 28% increase to FY26. The broker's FY25 production forecast is 10.2MMboe vs guidance of 9-10.5MMboe.

Equal-weight. Target rises to $1.80 from $1.67. Industry View: In-Line.

Sector: Energy.

Target price is $1.80.Current Price is $1.89. Difference: ($0.09) - (brackets indicate current price is over target). If KAR meets the Morgan Stanley target it will return approximately -5% (excluding dividends, fees and charges - negative figures indicate an expected loss).