Downgrades begin for LNG firms

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And so it begins for energy, with the sell side repeating its iron ore price mistakes:

Morgan Stanley has trimmed its earnings expectations and price targets for Australian energy companies after lowering its oil price forecasts.

Its revised Brent oil price forecasts are US$90/barrel for 2015 and US$95 a barrel for 2016, down 8% and 7% from previous forecasts.

But it keeps Overweight ratings for Woodside (WPL), Oil Search (OSH), Karoon (KAR) and Senex (SXY), and Equalweight ratings on Origin (ORG), Santos (STO), Beach (BPT), Drillsearch (DLS) and Horizon (HZN).

It’s the right move but they’ll be chasing their tales on this as well. Brent at $70-75 for 2015 and 2016 is much more realistic.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.