Woodside Energy Group Ltd (ASX: WDS) shares are having a strong finish to the week.
In afternoon trade, the energy giant's shares are up almost 4% to $26.23.
Let's now see if the team at Macquarie Group Ltd (ASX: MQG) believes that its shares can keep rising from here.
What is Macquarie saying about Woodside and its shares?
Macquarie was pleased with Woodside's performance during the second quarter of FY 2025. It highlights that the company's production and guidance were both ahead of estimates. The broker said:
WDS's 2Q was very solid with 50.1MMboe production driving a narrowing of guidance (US$3.3bn revenue was a highlight, beating VA consensus by 10%).
Sangomar strength continues: Another strong quarter, running above nameplate (101kb/d gross); reservoir decline will come, but it is pleasing to see strong performance continuing.
Another positive is that Macquarie points out that management revealed that its major projects are on time and budget. It adds:
Major projects broadly on-schedule and on-budget: (i) Beaumont New Ammonia is 95% complete, first production now "late CY25", (ii) Scarborough is 86% complete, platform hull & topsides connected, focus now on remaining integration & pre-commissioning scope. Pluto Train 2 site has now reached peak workforce numbers. First LNG 2H CY26. (iii) Trion is 35% complete with FPU detailed engineering finalised, procured all equipment and bulk materials, first oil 2028, and (iv) Louisiana LNG has commenced, T1 is 22% complete, progressing marine offloading facility, civil works, etc. First LNG targeted for 2029.
Buy, hold, or sell?
Despite the above, at present, Macquarie is sitting on the fence when it comes to Woodside shares and has the equivalent of a hold rating on them.
According to the note, the broker has reaffirmed its neutral rating with an improved price target of $26.00. This is largely in line with where its shares are trading this afternoon.
Commenting on its neutral rating, the broker said:
Neutral. Our lacklustre oil & weakening spot LNG outlook (in 2027/28) makes it difficult to become positive here. However, near-term operating performance is excellent & WDS shares will benefit from flow as the XRG/ Carlyle takeover of STO progresses to binding.
Valuation: Our 12-month TP is +8% to $26.00/sh, still based on a 50/50 weighting to DCF-based SOTP and weighted EV/EBITDA multiples. Catalysts: Oil and LNG pricing (eg, clarity on bilateral tariff agreements for key countries), Louisiana LNG sell-down and FID, Sangomar production, Scarborough progress.
