Electricity Generating stake may aid earnings; BP plan may shift narrative
The company-level roundup centered on Eni’s possible special dividend and Electricity Generating’s proposed expansion of a U.S. power-plant stake. It also assessed Ampol’s opposing operating results, Mercury NZ’s position against annual guidance and BP’s deleveraging strategy.
RBC Capital Markets analyst Biraj Borkhataria said the Italian energy major Eni could announce a €1 billion special dividend at its third-quarter results. Borkhataria said Eni’s financial framework allows for a special dividend given oil prices have been above $90 a barrel and that additional cash could push the company’s buyback higher. Eni had already increased its buyback for the year to €3.4 billion from €1.5 billion previously. Eni shares traded 0.3% higher at €26.23.
CGS International analyst Rasmiman Sermprasert said in a research report that Electricity Generating’s earnings stand to benefit from a larger stake in the 980-megawatt Linden Cogen plant in the United States. The Thai independent power producer signed a purchase agreement this month to acquire an additional 12% stake, which would raise its ownership to 50%.
Sermprasert said the acquisition could be earnings-accretive from 2027 if relevant U.S. regulatory approvals were obtained, which were expected by early January 2027. CGS raised its 2027 and 2028 earnings-per-share forecasts for Electricity Generating by 3% and 2%, respectively. The brokerage lifted its target price to 158.50 baht from 158.00 baht while retaining an add rating. Shares were unchanged at 125.50 baht.
Jefferies said Ampol’s third-quarter update surprised it for two opposing reasons. The convenience-retail business continued to deliver despite weak consumer sentiment, high fuel prices and a tougher fuel-margin backdrop. Jefferies said the performance of Ampol’s refining arm was weaker than expected, and Ampol captured less of the upside from strong regional cracks largely due to extended planned maintenance.
Jefferies retained a hold call and cut its Ampol target by 3.3% to A$44.00 a share, with the company ending Monday at A$41.93. Jefferies analyst Michael Simotas said, “Convenience execution is creditable, Refining margin should be a tailwind for some time and FSSP 2 likely positive, but upside is largely priced in.” FSSP 2 refers to the expected outcome of a review into the government’s Fuel Security Services Payment, which supports refiners during periods of low refining profitability.
Macquarie said New Zealand-based renewable power generator Mercury NZ was approaching the threshold where it would consider upgrading its annual earnings guidance. First-quarter performance implied quarterly Ebitdaf of NZ$357 million, up 17% from a year earlier. Mercury NZ currently expects annual Ebitdaf of NZ$1.075 billion because of new power generation, tight cost control and 4.1 terawatt hours of hydro output.
Macquarie said its forecasts pointed to a 3% beat. “We see overall upside to FY27 Ebitdaf guidance mainly in mass market and telco contributions,” Macquarie said. The firm kept a neutral call and raised its target by 2% to NZ$7.12 a share. Mercury NZ shares fell 0.8% to NZ$6.65.
Jefferies analyst Mark Wilson said investors were rewarding BP’s deleveraging strategy after windfall earnings helped reduce net debt. Wilson said the British energy major’s planned strategy and outlook update would help shift the market narrative from asset disposals toward growth and shareholder returns. BP shares traded 0.15% higher at 614.90 pence.
Oil prices edged lower in early Asian trade. ANZ Research analysts said in a report, “The Trump administration continues to talk up its efforts to support oil flows, with Energy Secretary Chris Wright saying they had recovered to about 80% of their pre-conflict levels.” The analysts said “efforts to support the fuel market are likely to fall short,” citing “rising supply risks in the Middle East.”
The Wall Street Journal reported separately that Iran had been providing Yemen’s Houthi militia with intelligence and targeting assistance for attacks on Saudi Arabia. Front-month WTI crude futures were 0.3% lower at $103.32 a barrel, while front-month Brent crude futures were down 0.2% at $109.36 a barrel. Both benchmarks remained above $100 despite the declines.
Across the company-level items, analysts focused on Eni’s possible payout, Electricity Generating’s conditional stake acquisition, Ampol’s operating divergence, Mercury NZ’s guidance threshold and BP’s debt reduction. The oil-market assessment supplied a separate warning about efforts to support flows amid rising Middle East supply risks.