The Woodside Energy Group Ltd (ASX: WDS) share price is up 1.8% in early afternoon trade today after falling 2.6% on Friday.
Today's rebound comes on the back of higher crude oil prices. Brent crude gained 1.9% overnight amid news that China is rolling back its economy, hampering COVID zero policies.
Brent is currently trading for US$87.23 per barrel. That's a 5.1% increase since last Tuesday.
However, oil and gas prices have remained sharply down over the past month. And the Woodside share price is also down 7% since this time last month.
Which brings us to…
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Is the Woodside share price cheap following its recent dip?
Whether the Woodside share price represents good value at current levels depends on who you ask.
A number of analysts were disappointed after the S&P/ASX 200 Index (ASX: XJO) oil and gas stock released its FY23 guidance on 29 November.
In its first full year of production since its petroleum transaction with BHP Group Ltd (ASX: BHP), Woodside forecast production of 180 – 190 million barrels of oil equivalent (MMboe).
That figure came in lower than consensus expectations.
UBS counts amongst those with a bearish near-term outlook for the oil and gas giant, reducing its target for the Woodside share price to $34 from $34.40 That's some 5% below the current price of $36.23 per share.
According to UBS (courtesy of The Australian Financial Review):
Despite a miss to 2023 production & capex, valuation still appears very full at current prices with WDS implying $78/bbl oil prices vs peers at low $60s/bbl.
Barrenjoey has also downgraded Woodside shares to underweight, dropping its price target from $35.80 per share to $35.20. Barrenjoey's analysts had forecast FY23 production of 203MMboe.
According to Barrenjoey analyst Dale Koenders (quoted by The Australian):
We think the cracks from execution risks are starting to show for Woodside given the Sangomar start-up has been delayed from 2023 to 2H23 in August and as MODEC is shifting Flotation and Production Storage Offloading Unit construction / commissioning from China to Singapore to mitigate COVID-related labour constraints.
Sounding off for the Woodside bulls
Coming in with a positive view on the Woodside share price after the past month's dip is Evans & Partners.
Its analysts, Adam Martin and Branko Skocic, kicked off Woodside Energy's research coverage with a positive rating, valuing the company at $40 per share.
With new energy projects still lacking investment, they said the recent dip in Woodside "could provide an attractive entry point".
According to the analysts (courtesy of The Australian):
For LNG markets in particular, there appears no easy solution to bring on new global supply, with lead times five years plus. This is coupled with demand growth across Europe – replacing Russian pipeline gas – and further growth out of Asia. We believe LNG will remain critical in the initial stages of the Energy Transition.
The Woodside share price is up 60% in 2022.
