Can the Woodside share price leap 14% by Christmas?

Woodside shareholders could see the ASX 200 energy share lift off in time for Christmas.

| More on:
A woman is excited as she reads the latest rumour on her phone.

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

The Woodside Energy Group Ltd (ASX: WDS) share price closed 1.0% lower on Thursday.

Shares in the S&P/ASX 200 Index (ASX: XJO) oil and gas stock finished the day trading for $32.08 apiece.

That came amid a dip in the oil price, with Brent crude oil slipping to US$80.48 per barrel.

For some context, the ASX 200 also ended the day in the red, down 0.67%.

That's the recent price action for you.

Now, can the Woodside share price leap 14% in time for Christmas?

14% upside for the Woodside share price?

There are a number of reasons I'm optimistic on the outlook for the ASX 200 energy stock.

Atop its existing portfolio of operational high-quality, low-cost oil and gas assets, the Woodside share price is likely to enjoy long-term support from the company's three major growth projects.

Namely, Sangomar, located in Senegal; Scarborough, located in Australia; and Trion, located in Mexico. While Woodside is still working on the final environmental approvals for the Scarborough project, management is targeting the offshore project's first LNG cargo in 2026.

"The combination of the strong base business and these new investments will generate strong future cash flows and returns for our shareholders across the price cycle," Woodside CEO Meg O'Neill said last week.

As for the 14% boost in the Woodside share price, Goldman Sachs has a buy rating on the stock with a $36.60 price target. That's 14% above yesterday's closing price.

Now to be clear, this is a 12-month price target. So even if Goldman's analysts have this right, Woodside shares might not get there by Christmas.

Goldman Sachs likes the ASX 200 energy stock for its "attractive valuation discount", with its analysts noting Woodside trades "at a 14% discount to NAV after recent oil price weakness".

Goldman also cites oil production and earnings growth, with "4% production growth over the next 12 months" expected.

All I want for Christmas…

Now, in my opinion, the biggest single factor that could help send the Woodside share price up 14% by Christmas would be a significant uptick in oil and gas prices.

The oil price has come down 13% since 19 October, resulting in an almost equal slide in the ASX 200 energy stock.

But with both OPEC+ and the International Energy Agency (IEA) now forecasting an increase in oil demand in 2024, a rebound in crude prices back to mid-October price levels is quite possible before Santa comes knocking.

According to the IEA, "global oil demand is set to rise to a record annual high of 102.9 million barrels per day (mb/d) in 2024".

As for the more immediate outlook for oil, and by connection the Woodside share price, the IEA said that global oil demand was "still exceeding available supplies heading into the Northern Hemisphere winter".

Motley Fool contributor Bernd Struben 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

Two fists connect in a surge of power, indicating strong share price growth or new partnerships for ASC mining and resource companies
Mergers & Acquisitions

Santos share price rockets 11% on confirmed Woodside merger talks

A merger between Santos and Woodside would create an Aussie oil and gas company of unprecedented scale.

Read more »

Oil worker using a smartphone in front of an oil rig.
Energy Shares

Big oil: Are Woodside shares about to swallow up Santos?

Could Woodside be about to get even bigger?

Read more »

sad looking petroleum worker standing next to oil drill
Energy Shares

Woodside shares tumble as oil price plunges to five-month lows

Woodside shares have come under pressure with Brent crude oil prices falling 23% since late September.

Read more »

two men in mining hats shake hands on a deal with gas pipelines in the background, indicating a deal between Senex and 29 Metals
Share Gainers

Guess which ASX All Ords share just leapt 59% on a new gas discovery

Investors are bidding up the ASX All Ords energy share following a significant gas discovery in southern Africa.

Read more »

Kid on a skateboard with cardboard wings soars along the road.
Energy Shares

Why is this ASX hydrogen stock up 28% today and over 100% in a month?

This small-cap stock has been catching the eye in recent weeks.

Read more »

Close up of a sad young woman reading about declining share price on her phone.
Energy Shares

Why is the Boss Energy share price sinking 5% today?

This uranium share is raising funds. But why?

Read more »

Natural gas plant engineers using laptop
Energy Shares

Buying Woodside shares? Here's how the ASX 200 energy stock is expanding in Mexico

Woodside’s new LNG agreement will expand its access to key Asian energy markets.

Read more »

a man in a suit holds up a hand and a stop sign at a roadblock positioned over a bitumen road .
Capital Raising

Why are Boss Energy shares in a trading halt?

This uranium share is raising funds. But why?

Read more »