Woodside Energy Group Ltd (ASX: WDS) shares are in the green today.
Shares in the S&P/ASX 200 Index (ASX: XJO) oil and gas stock closed yesterday trading for $28.74. In morning trade on Tuesday, shares are changing hands for $28.88 apiece, up 0.5%.
For some context the ASX 200 is up 0.7% at this same time.
That's today's price action for you.
Now, here are four reasons BW Equities' Tom Bleakley is optimistic on the outlook for Woodside shares (courtesy of The Bull).
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Why Woodside shares could run hot into 2025
The first reason to buy Woodside shares is the strong outlook for global oil demand and prices.
Bleakley, who has a 'buy' rating on the ASX 200 oil and gas company, noted that "This energy giant has been benefiting from increasing crude oil prices."
He added, "Electric vehicle sales growth has been slower than expected in the US."
Indeed, while EV adoption is still growing in the world's biggest economy, the growth rate has slowed significantly. That portends a greater reliance, for longer, on petrol cars. A reliance that certainly remains the case across the fast-growing African continent.
At the time of writing, Brent crude is trading for US$86 per barrel, up from $78 per barrel on 4 June. And with global crude demand forecast to increase to new record highs in 2025, 4 June could well mark the lows for the year ahead.
Which brings us to the second reason to buy Woodside shares now, some extra passive income.
"The company was recently trading on an appealing dividend yield above 7%," Bleakley said.
Over the past 12 months, Woodside has paid out a total of $2.16 per share in fully franked dividends. At the current share price, that equates to a fully franked trailing yield of 7.5%.
Moving on to the third reason to buy the ASX 200 oil and gas company today, Bleakley noted that "Woodside recently announced it had achieved first oil from the Sangomar field in Senegal."
Woodside reported that first oil on 11 June.
As we noted about the project growth potential on the day:
The deepwater Sangomar Field Development Phase 1 project includes a stand-alone floating production storage and offloading (FPSO) facility. The nameplate capacity stands at 100,000 barrels per day. The project includes subsea infrastructure designed to allow further development phases.
Rounding off the list, the fourth reason to buy Woodside stock today is that shares are in an uptrend yet remain well below their recent highs.
"Woodside shares have risen from $26.97 on June 24 to trade at $29.22 on July 4. The shares are still trading well below $39 achieved in August 2023," Bleakley said.
Those August 2023 levels represent a potential upside of 35% from current prices.
