Up 80% in 2022, is the Woodside share price 'nearing its peak'?

Is it time to take profits on Woodside shares?

| More on:
Young businessman standing on the top of the mountain punching fist in the air.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Woodside shares have soared this year, significantly outperforming the ASX 200
  • The company has benefitted from higher energy prices
  • But, one expert thinks that Woodside could now be near its peak

The Woodside Energy Group Ltd (ASX: WDS) share price has been on a great run in 2022, gaining almost 80%. This compares to the S&P/ASX 200 Index (ASX: XJO), which has fallen by more than 5% over the year to date.

Woodside has benefitted enormously from the higher energy prices that followed Russia's invasion of Ukraine.

But, ASX oil shares don't typically just keep growing and growing indefinitely. There are normally cyclical factors at play (including supply and demand), that impact oil and gas prices. This can then, in turn, weigh on the share prices of ASX 200 energy companies like Woodside.

Could the Woodside share price be reaching the peak?

No-one can know exactly what share prices will do next week or next month. However, investors can certainly speculate as to how much more growth a business may have in it, particularly when it is so dependent on commodity prices. At some point, its valuation may get too steep for investors to want to buy any more shares.

Tim Haselum from Catapult Wealth today had a warning for investors that may be considering Woodside shares. On The Bull, he called the current Woodside share price a sell, commenting:

The energy giant delivered record production and revenue in the third quarter ending September 30, 2022. But our concerns are possibly slowing economies in Europe and the US and potentially softer crude oil prices. The stock has risen from $22.77 on January 5 to trade at $38.15 on November 10. We believe the stock may be nearing a peak. Investors may want to consider taking some profits.

Third quarter update

Woodside's Q3 update reflected the first full three months including contributions from the former BHP Group Ltd (ASX: BHP) petroleum business.

Production was 51.2 million barrels of oil equivalent (MMboe), up 52% from the second quarter of 2022.

Sales volume was 57.1 MMboe, up 59% from the second quarter of 2022.

Revenue for the quarter was US$5.86 billion, up 70% from the second quarter of 2022.

The company achieved a portfolio average realised price of $102 per barrel of oil equivalent. Woodside sold 24% of produced LNG at prices linked to gas hub indices. The resource price is likely to continue to have a major impact on the Woodside share price.

The business upgraded its 2022 full-year 2022 production guidance to 153 MMboe to 157 MMboe.

Woodside also told investors that it has commenced fabrication of subsea flowlines for the Scarborough and Pluto Train 2 projects in Western Australia, which combined are now 21% complete.

It has also commenced the subsea installation campaign for the Sangomer field development offshore Senegal, which is now 70% complete.

Woodside share price snapshot

Over the past month, Woodside shares have risen by around 15%. And whilst some brokers may believe Woodside has reached its peak, many investors obviously disagree, sending the oil giant's shares around 2% higher in early afternoon trade on Monday.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Energy Shares

A bearded man holds both arms up diagonally and points with his index fingers to the sky with a thrilled look on his face over these rising Tassal share price
Energy Shares

Why is the Beach Energy share price racing higher on Thursday?

This energy producer delivered some big news this afternoon.

Read more »

A person is weighed down by a huge stack of coins, they have received a big dividend payout.
Energy Shares

Own Ampol shares? Get ready for your monster dividend payment

Ampol investors are about to enjoy their largest-ever dividend.

Read more »

A man sees some good news on his phone and gives a little cheer.
Energy Shares

Buy Woodside shares for a 20% gain and 4.5% dividend yield

Morgans thinks investors could get big returns from this energy giant.

Read more »

Woman holding $50 notes and smiling.
Dividend Investing

A 36% yield from this ASX dividend share? Here's how these forward-looking investors made it happen

Some savvy passive income investors are earning a 36% yield from this ASX dividend star.

Read more »

A Paladin Energy miner wearing a hard hat and protective gear stands in front of a large mining truck and smiles to the camera.
Energy Shares

Uranium is set to boom, and this is the 'premium' ASX stock to buy

Shaw and Partners' Jed Richards reckons these are the shares to buy for the nuclear energy theme.

Read more »

Happy coal miner.
Energy Shares

How these ASX 200 energy shares could unexpectedly burn brighter

ASX 200 energy shares are facing rising global demand for their products.

Read more »

Worker inspecting oil and gas pipeline.
Energy Shares

ASX energy shares losing charge amid fresh warnings of gas supply shortfalls

Many energy commodity prices fell overnight and this is hitting ASX energy shares today.

Read more »

A miner stands in front oh an excavator at a mine site
Energy Shares

'We have reached a bottom': 5 ASX uranium shares leaping higher this week

ASX uranium stocks have enjoyed explosive share price growth over the past year.

Read more »