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With the WPL price crashing, but also oil crashing, is it considered a strong buy at present – it seems to have a great dividend yield?
A: Thanks for the question.
The brokers have gone decidedly neutral on Woodside, seeing it as one of the energy stocks that will be less impacted by the oil price decline. According to FN Arena, the consensus target price is $38.12 compared to a closing price on Friday of $34.60.
That said, it looks like we will continue to see some further declines in the oil price, so it is hard to imagine that Woodside will not be impacted. Brokers have downgrade their 2015 earnings forecasts, and are now factoring in a dividend cut in FY 15. While buying in the “gloom” is the obvious strategy – I would only be nibbling at the moment – my sense is that there is more share price weakness to come.
