[ad_1]
“Henry Hub should be positive for declining gas prices (due to reduction in local export capacity for the next three months)
Morgan Stanley said in a note to clients, “This expands marketing margins to 40% of portfolio gas imported from the US. We believe the stock price will rise in absolute terms over the next 60 days.” Will grow.” GAIL shares rose 0.5%. Lowered from day’s high of ₹151.90 to close at ₹147.70.
Freeport LNG’s damage from last week’s fire at its Texas plant will remain completely offline until September, with only partial operations until the end of the year, according to Reuters.
“This has increased gas availability in the US, softening prices while tightening prices in the European LNG market,” Jefferies said in a client note. “This is a tailwind for GAIL’s trading and petrochemical profitability in FY23E.” Jefferies has a price target of ₹180 on the stock. Morgan Stanley’s price target on the stock is ₹207.
Jefferies said arbitrage in GAIL’s uncontracted Henry hub-linked volumes will see a sharp correction as European and Asia LNG markets tighten due to supply crunch.
Shares of GAIL have gained 12.4 per cent since January, compared to a 11% fall in the Nifty. Morgan Stanley said GAIL’s valuation – measured by the price-to-earnings (PE) ratio – at 8 times FY23 estimated earnings is not only attractive but also a tailwind of the earnings upgrade cycle because of clarity on some pipeline tariffs. emerges.
“Furthermore, an uptick in domestic fertilizer capacity coupled with a steady improvement in domestic demand as well as strong oil prices coupled with higher LPG prices should support earnings,” the brokerage said.
Jefferies said valuations at one standard deviation are lower than the seven-year average PE ratio, which makes the risk-reward favorable. The brokerage said the stock also offers a 7% dividend yield.
[ad_2]
Source link
