Shares of hydrocarbons giant Woodside Energy Group Ltd (ASX: WDS) pushed higher today and finished trading 1.02% in the green at $32.85.
The gain brings Woodside's return for the year up to 50%, having clipped another 4% of upside over the past month alone
Is it too late to buy Woodside shares?
Energy shares have been the darlings of the ASX this year having secured tidy gains across the board.
Woodside has been a star player given its size and exposure to key markets that have seen its operating metrics improve year over year.
In fact, ratings agency S&P Global ratings has even revised its credit summary on Woodside from negative to stable.
Citing 'improved headroom and funding flexibility' the global ratings agency also said that Woodside's chunky free cash flow conversion and strong balance sheet are well received.
"Over the next few years, we expect the Woodside's solid free cash flow generation, improved balance sheet position, and elevated oil prices to help the company fund upcoming growth opportunities," S&P Global analysts wrote.
"This [free cash flow] demonstrates capacity to substantially fund the company's extensive capex of about $US4.3billion to $US4.8 billion for 2022," it added.
We believe the company will manage its near-term growth risks by maintaining ample liquidity ($US7.9 billion of liquidity available at the end of June 2022) and support cash flow by opportunistically hedging part of its production to lock in relatively strong prices.
The stable outlook reflects our view of Woodside's financial buffer to fund its upcoming major capex projects while sustaining FFO-to-debt above 45 per cent through the cycle.
Meanwhile, 9 out of 15 brokers covering Woodside shares have it rated as a buy right now, with the remaining 6 tilted to hold, per Refinitiv Eikon data.
That's down from 10 buy calls back in June of this year. The consensus price target has shifted higher to $36.33 from this list, however.
In the last 12 months of trade, Woodside shares have secured a 70% gain.
