3 OIL share price target reports by brokerages below. See what is analyst's view on OIL share price forecast, rating, estimates, valuation and prediction behind the target. You may use these research report forecasts for long-term to medium term for your investment or trades in 2020.
Valuation – Maintain Buy rating on Oil India with revised PT Rs. 165: We have lowered our FY2020E earnings per share (EPS) and FY2021E EPS by 13-23% to factor in: 1) lower oil & gas realisation given recent weakness in crude oil prices and domestic gas prices are also expected to decline in H1FY2021E and 2) lower oil and gas sales volume assumption. We have also introduced our FY2022E EPS of Rs. 21.8. Oil India is trading at an attractive valuation of 6.1x FY2022E EPS (29% discount to its historical average one-year forward PE multiple of 8.7x) and also offers high dividend yield of 7-8%. Hence, we maintain our Buy rating on Oil India with revised SoTP-based PT of Rs. 165.
We lower our estimates by 2-7% to factor in lower volume growth and realization. OINL stock has underperformed broader index due to weak volume trajectory and concerns of stake divestment by government. Capital allocation risk is also there given investments in Mozambique where returns will be back ended. We maintain ‘Accumulate’ with a price target of Rs186 (Rs231 earlier) based on 8x FY21E.
We model Brent price at ~USD67.7/USD70bbl and INR/USD at 71.3/73.8 for FY20/FY21. We expect EPS of INR28.2/INR30.1 in FY20/FY21. We believe USD60-70/bbl should not be a concern for return of the subsidy regime. The stock trades at 5.9x FY20E EPS of INR28.2. Dividend yield is attractive at 7.6%/8.1% for FY20/FY21. For OINL, we use SOTP-based fair value of 8x FY21E adj. EPS of INR26.8, and add investments of INR49 to arrive at a price target of INR216. Maintain Buy.
Maintain Buy rating on Oil India with a revised PT of Rs. 200: We have lowered our FY2020 and FY2021 earnings estimates to factor in lower oil and gas sales volume assumption. The sharp correction of 12% in the stock price of Oil India in the last one month has made the valuation attractive at 5.6x its FY2021 EPS, which is at 35% discount to the historical average one-year forward PE multiple of 8.6x. Moreover, the stock offers healthy dividend yield of 7-8%. Hence, we maintain our Buy rating on Oil India with a revised SoTP-based PT of Rs. 200. The downward revision in our PT for Oil India is on account of cut in our FY2021E EPS and lower value of listed investments.
We maintain BUY on Oil India post an in-line 1QFY20. Although we do agree that there are concerns over lack of production growth for OIL, we think that the current valuations (2.3x FY21 EV/EBITDA and 4.7x FY21 PER) indicate strong pessimism. Upstream companies were out of flavor despite realising market price for crude oil, mainly on account of the subsidy sharing with OMCs. We expect oil prices to remain muted owing to the robust supply from US Shale. This is despite production cuts from OPEC and non-OPEC countries. Thus, there is no concern over the subsidy sharing. OIL generates OCF yield of almost 30% and divided yield of ~8.5% over FY20/21E. The current valuations are contextually lower at 2.3x FY21E EV/EBITDA and 4.8x FY21 PER. Our TP is Rs 225/sh (6x Jun-21E standalone + Rs 84 from investments). Maintain BUY.
At attractive valuation OIL’s stock price has underperformed (-35%) the broader market (+4%) since Jan-18 (1) In the anticipation of subsidy sharing in a rising oil price environment and (2) Lower allocation of petroleum subsidy in the FY19 budget. The current stock price factors in the subsidy burden on the domestic Exploration and Production (E&P) companies. Strong shale oil supplies from USA will provide a cap on crude prices. However, the supply cut by OPEC and non-OPEC countries (excluding USA), will provide strength to crude prices in near term. Share of crude oil revenue in total revenue is ~80% for OIL, therefore with no subsidy sharing with OMCs, OIL remains a pure play on crude oil prices. Our TP is Rs 227/sh (6x Dec20E standalone + Rs 82 from investments). Maintain BUY.
Characterized by higher gas revenue, lower tax rate, record-high quarterly PAT Valuation and view: 9MFY19 EBITDA stands at INR44.0 (+42% YoY). 9MFY19 PAT stands at INR28.0 (+55% YoY). Due to better than expected results, we raise our FY19 EPS from INR27.7 to INR29.3. We model Brent price at ~USD70/70bbl and INR/USD at 73.1/74.2 for FY20/21. We expect EPS of INR30.7/31.1 in FY20/21. We believe USD60-70/bbl should not be a concern for return of subsidy regime. Rising gas price would be a positive for the stock. Our SOTP-based fair value stands at INR239 (incl. investment value of IN67). We value OINL at 8x Dec’20E adj. EPS of INR27.5, and add investments of INR67 in IOCL, NRL and BCPL. The stock trades at 5.5x FY20E EPS of INR30.7. Dividend yield is attractive at ~8.4%. Maintain Buy.
SOURCE: Data from D'Market via Quandl. Intraday data delayed 15 minutes.
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