Morgan Stanley rates VEA 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.

The broker's preference remains downstream players Ampol ((ALD)) and Viva Energy.

The analyst cut the 1H25 Geelong refiner intake forecast and lifted the margin slightly. Net debt estimates also lowered after revisions to working capital assumptions.

The broker will be looking for commentary on cost saving, synergies and store rollout progress at the upcoming quarterly.

Equal-weight. Target rises to $2.16 from $1.99. Industry View: In-Line.

Sector: Energy.

Target price is $2.16.Current Price is $2.29. Difference: ($0.13) - (brackets indicate current price is over target). If VEA meets the Morgan Stanley target it will return approximately -6% (excluding dividends, fees and charges - negative figures indicate an expected loss).