Amplitude Energy Could More Than Double, Broker Says
Synopsis
Recent share price declines have left the offshore gas producer undervalued, according to Morgans, which expects stronger earnings to support a recovery.
Key Highlights
- Amplitude Energy shares' ASX AEL forecast stayed positive with Morgans keeping a buy rating.
- The broker has a $3.00 price target on AEL, which compares favourably with the current price of $1.27.
- Amplitude stock is down more than 40% in the past year
- Stronger growth ahead through acquisition of Amplitude Energy Artisan gas field in Otway Basin.
The ASX AEL forecast for Amplitude Energy shares has come to the forefront again in recent days after broker Morgans said this latest sell-off means investors can now buy the gas producer.
Morgans kept its recommendation to Buy intact, with a target price for AEL shares of $3.00 from around the recent trading price near $1.27, suggesting room for more than 100% upside from current prices.
Broker Upgrade Highlights Long Term Value at Amplitude Energy
Amplitude stock is down more than 40% over the past year and off 57% since its high in February.
Morgans said subdued exploration outcomes, soft spot gas prices and a lack of clarity over Australia’s remaining gas reservation policy have weighed on investor sentiment. The broker cut its target price by another 17% but noted the plunge in the share price has far exceeded the change in value of the underlying company, meaning ASX oil stocks are presenting an opportunity for investors.
Deal with Amplitude Energy to grab stake in Otway Basin
In May, Amplitude completed its purchase of a 50% stake in the Artisan gas field in the offshore Otway Basin from Beach Energy for $58.3 million. Morgans stated the acquisition enhances the East Coast Supply Project by providing relevant infrastructure, reducing development expenses and expediting production.
In the months ahead, Amplitude anticipates hastening towards a final investment decision on the project itself, with drilling at the Juliet and Annie wells slated to begin in late July or early August. Investor sentiment appears to be approaching peak negativity, and reiterated its positive view on one of the ASX small cap energy stocks 2026.
Source: Motley Fools
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