Shares in Beach Energy Ltd (ASX: BPT) have been on a lumpy run these past 3 months. Prices have come off a high of $1.50 and are trading at $1.22 at the time of writing. That's up 0.41% on yesterday's close.
As such, shares are now trading in line with July 2021 ranges and are down around 32% this year to date. Oil prices have been equally as volatile these past few months. That downward pressure has been spilling over into adjacent markets and ASX resource players such as Beach Energy.
Even with the recent pullback in share price, several analysts remain constructive on Beach Energy coming into 2022. So is it a buy? Let's take a closer look.
Is Beach Energy a buy in 2022?
Interestingly, the team at Macquarie reckons that 30% shareholder Seven Group Holdings Limited (ASX: SVW) could obtain control over the entire business, which should be factored into the investment debate.
Macquarie notes "it would not be a stretch for Seven to obtain control (circa $500 million to $600 million additional stock)".
It also notes that Seven has historically shown "an appetite to act rapidly, where it sees opportunity to add value from obtaining control of underperforming portfolio companies".
Macquarie believes Beach's gas-oriented portfolio is resilient to what it dubs "the energy transition", however, it remains neutral on the shares at a $1.40 valuation.
Checking the spread of analysts provided by Bloomberg Intelligence, the sentiment appears overwhelmingly bullish on Beach Energy coming into 2022.
Specifically, 14 analysts — or around 74% of the list — reckon that Beach Energy is a buy, while just 3 have it as a hold and 2 as a sell.
According to the list, the consensus price target for the next 12 months is $1.64, implying an upside potential of 35% at the time of writing.
However, the sentiment shows significant spread, with the distance between the highest and lowest price targets spanning 159% from $2.70 to $1.04.
Plus, even if these forecasts play out and the stock gains 35% to the consensus price target, Beach Energy would still just be reclaiming its losses of 34% made over the last 12 months.
Moreover, Beach Energy has missed 6 out of its last 8 earnings per share (EPS) estimates and trades at a forward price to earnings (P/E) of 6.26x at the time of writing. That's below the S&P/ASX 300 Metals and Mining Index (ASX: XMM)'s trailing P/E of 15.2x.
Beach Energy share price summary
The Beach Energy share price has lost momentum these past 12 months and is down 34% in that time after losing a further 33% this year to date.
The downward pressure has continued this last month with shares down more than 2% in that time.
