Energy markets continue to rally despite recent pullbacks and investors have been rewarding ASX energy shares accordingly — including the Beach Energy Ltd (ASX: BPT) share price.
The benchmark for the sector, the S&P/ASX 200 Energy Index (ASX: XEJ), is up 28% this year to date after a volatile June.
The Beach Energy share price has been a benefactor of this rally. The ASX gas and oil share has been a consistent gainer these past 12 months, up 41% in that time, or 39% this year to date, as seen below.
How high can the Beach Energy share price go?
Analysts at UBS reiterated their buy rating on Beach Energy last week. The UBS team now reckons that Beach can reach a valuation of $1.95 per share.
That's up 8% from UBS' last rating of $1.80 per share.
Surging gas prices are the key element underlining the broker's upgrade. And it's quite easy to see why.
US natural gas has reversed from lows to trade at US$6.45/MMBtu, while Dutch and UK gas are up 303% and 103% year on year respectively.
Returns for each of these contracts are plotted alongside the Beach Energy share price below.
Compared to the other ASX energy giants, "Beach Energy has the most production exposure (56%) to east coast domestic gas", the broker wrote in its research note.
Although, it also acknowledged that Beach has "some sales restrictions on a material portion of uncontracted gas from H2 2023".
Those at UBS join another 13 brokers in rating the Beach Energy share price a buy right now, according to Bloomberg data.
Curiously, Macquarie and Canaccord Genuity are both neutral, whereas Morgan Stanley is underweight.
The consensus price target from this list is $1.92 per share, not too far off UBS' objective. Time will tell if it continues its upward ascent to $1.95 per share.
At the time of writing on Thursday, Beach Energy shares are down 3.21% to $1.73.
