Why is the Ampol share price zooming higher today?

Ampol has delivered the goods during the third quarter. Here's how profitable it has been.

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Two colleagues at work looking at a tablet and smiling at a rising share price.

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The Ampol Ltd (ASX: ALD) share price is having a very good session.

At the time of writing, the fuel retailer's shares are up 3% to $32.73.

Why is the Ampol share price rising today?

The catalyst for this gain has been the release of the company's third-quarter update which revealed a big jump in fuel sales.

According to the release, Ampol achieved total fuel sales volumes of 7,054 ML for the three months ended 30 September. This represents a 26% increase over the prior corresponding period.

Another positive was that the company reported a Lytton Refiner Margin (LRM) of US$19.69 per barrel for the third quarter. This is up 27% year on year and continues to be above long-term averages.

Ampol took full advantage of its strong LRM, delivering a 1.5% increase in refinery production to 1,569 ML during the three months.

This ultimately led to Ampol posting unaudited group RCOP earnings before interest and tax (EBIT) of $438.2 million, which is up an impressive 65% over the prior corresponding period.

Should you invest?

While the team at Macquarie has not yet responded to this update, its analysts were feeling bullish on the Ampol share price prior to today.

For example, last week the broker put an outperform rating and $37.25 price target on its shares.

Even after today's solid gain, this still implies a potential upside of approximately 14% over the next 12 months.

In addition, the broker is forecasting juicy dividend yields of approximately 7% in both FY 2023 and FY 2024. This boosts the total potential 12-month return on offer with the fuel retailer's shares beyond 20%.

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

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