The Beach Energy Ltd (ASX: BPT) share price has underperformed the market materially over the past 12 months.
During this time, the ASX 200 energy stock has lost almost 30% of its value.
And with its FY 2026 results now released, is it time to make an investment? Let's see what Bell Potter is saying.
Image source: Getty Images
What is the broker saying?
Bell Potter highlights that Beach Energy released a bit of a mixed result for FY 2026.
Although its EBITDA was stronger than expected, its underlying net profit after tax fell short of estimates. It said:
BPT reported FY26 EBITDA of $1,040m (BP est. $937m) and underlying NPAT of $355m (BP est. $380m). Reported NPAT of $281m was impacted by exploration expenses $75m (unsuccessful Otway Hercules-1) and unutilised infrastructure expenses $25m, mostly booked in 1H FY26. BPT declared a 2cps fully franked final dividend (BP est. 2cps).
As previously reported, BPT ended FY26 with cash of $213m and drawn debt of $600m, implying net debt of $387m and gearing (ND/(ND+E)) of 10.6%. BPT has $770m in undrawn facilities providing total cash liquidity of $983m. BPT's $1,370m debt stack matures: $350m in June 2027; $350m in August 2029; $370m in August 2028 and $300m in December 2030.
One positive is that the ASX 200 energy stock is expecting a decent increase in production in FY 2027. It explains:
BPT guided to FY27 production of 19.5-23.0mmboe (midpoint 10% higher on FY26 of 19.3mmboe) and capex $600-700m (FY26 $699m), of which <$450m is sustaining (FY26 $394m). Waitsia is a key volume driver, expecting to operate at 90% utilisation following a statutory shutdown in the current quarter.
BPT is expecting stronger Western Flank oil production, natural field decline in the Otway Basin and steady Cooper Basin output. An updated capital management framework abandons dividend payout guidance and instead focuses on sustaining production, providing growth flexibility while maintaining balance sheet strength (targeting gearing less than 15%). Dividends will be considered on an all-in free cash flow basis (after growth capex).
Should you invest?
According to the note, the broker has retained its hold rating and 95 cents price target on the ASX 200 energy stock.
Based on its current share price of 88.5 cents, this implies potential upside of 7.3% for investors over the next 12 months.
In addition, a 3.4% dividend yield is expected over the period, boosting the total potential return to around 10.7%.
Commenting on its recommendation, Bell Potter said:
BPT is focused on shifting from a production replacement cycle to building a longer term sustainable reserves position. The company is guiding to modest production growth in FY27 and relatively stable capex, enabling positive free cash flow and maintaining balance sheet strength for growth initiatives and potentially dividends. We are positive on BPT's exposure to Australian east coast gas markets (around half of sales volumes) and cautious with respect to global oil markets.
