A message from our CIO, Scott Phillips: "G'day Fools. If you're like us, you're dismayed by the events taking place in Ukraine. It is an unnecessary humanitarian tragedy. Times like these remind us that money is important, but other things are far more valuable. And yet the financial markets remain open, shares are trading, and our readers and members are looking to us for guidance. So we'll do our best to continue to serve you, while also hoping for a swift and peaceful end to the war in Ukraine."
The Woodside Petroleum Limited (ASX: WPL) share price has risen significantly in 2022. Since the start of the year, Woodside shares have increased by almost 50%.
But after such a steep rise, is the petroleum giant still an opportunity, or has it run too hard?
Oil price jump
The oil price has risen substantially amid the Russian invasion of Ukraine. Russia is, or was, one of the largest exporters of oil before the war.
However, Russia has been heavily sanctioned because of the attack on its neighbour.
Those sanctions may not be lifted any time soon, with several regions of Ukraine still being a warzone.
The United Kingdom foreign secretary Liz Truss recently told British media that Russian sanctions would only be removed once Russia had agreed to a complete ceasefire and fully withdrawn from Ukraine. It would also need to not commit any further aggression, or those sanctions would return.
The oil price remains high, and drivers around the world are paying a much higher price when they refill their vehicle with fuel.
Is the Woodside share price a buy?
The broker Citi currently rates Woodside as 'neutral', with a price target of $29.35. That implies a reduction of over 10% over the next year, if the broker ends up being right.
Citi thinks that the average Brent oil price will be around US$90 per barrel in 2022. The broker is expecting a strong year of profit in FY22 for Woodside.
At the current Woodside share price, Citi values it at around 9x FY22's estimated earnings.
However, the broker UBS rates the petroleum business as a buy, though the price target is only $29. So, that also implies a potential downside over the next 12 months. UBS thinks that the Woodside share price is taking into account the high oil price.
FY21 result
The company recently reported its result for the 12 months to December 2021. The numbers reflected a significant recovery from the COVID-impacted year of 2020.
Net profit after tax (NPAT) rose by 149% to $1.98 billion, while underlying NPAT soared 262% to $1.62 billion.
Annual sales volume was 111.1 million barrels of oil equivalent, with a realised price of $60.30 per barrel. That compared to a unit cost production of $5.30 per barrel.
The full-year dividend was $1.35 per share, up 255%.
Woodside share price snapshot
At the current Woodside share price, the company has a market capitalisation of $33 billion according to the ASX.
