Beach Energy Ltd (ASX: BPT) shares are a popular option for investors wanting exposure to the energy sector.
But are they a good option? Let's see what analysts at Macquarie Group Ltd (ASX: MQG) are saying about the ASX 200 energy stock.
What is the broker saying about this ASX 200 energy stock?
Unfortunately, the broker isn't a fan of Beach Energy's shares at current levels.
In fact, of the four major oil and gas shares on the ASX 200 index, it is the only one that has copped the equivalent of a sell rating in its latest Australia Energy note.
According to the note, the broker has reaffirmed its underperform rating on the ASX 200 energy stock with a trimmed price target of 90 cents (from 92 cents).
Based on its current share price of $1.17, this implies potential downside of 23% for investors over the next 12 months.
Commenting on the energy producer, Bell Potter said:
Beach Energy (Underperform): M&A required, targeted, but not yet visible (and STO no longer in play, in our view). Taroom trough partnership with Omega looks sensible. BPT has established LNG price exposure (oil and JKM hybrid) in recent periods via its bp offtake and North West Shelf processing (which likely runs for another three to four years). However, BPT still has less oil price leverage than the other upstream producers addressed in this report. We now assume Waitsia stage 2 (gas/LNG project) starts early in the December quarter.
Which energy stock is better?
The stock that Macquarie thinks investors should be buying for energy sector exposure is Santos Ltd (ASX: STO).
Macquarie has an outperform rating and $8.25 price target on its shares. Based on its current share price of $6.62, this would mean a gain of almost 25% for investors if the broker is on the money with its recommendation.
Speaking about why it likes Santos, its analysts said:
Santos (Outperform): Implied oil px US$51/bbl. Lower oil and LNG prices have hit 2026E EPS (-24%), which reduces FCF yield to 9% and our estimated dividend yield to ~6%. Following the recent deal-break (with the XRG-led consortium), we see (i) extraordinary value and (ii) a series of catalysts to drive STO share performance organically: Barossa first LNG cargo (4Q25), Pikka first oil (1Q26), and PNG LNG debt final payment (2Q26), followed by a combination of steady deleveraging (back to within target by end-2026E) and rising dividend yield (7% for 2027E). Gas market review is a current risk.
