Citi positive on Australian energy firms as September commodity prices improve
XLE•Citi sees a constructive September-quarter commodity price environment and double-digit 2026 core earnings growth for Woodside Energy and Santos. It raised Santos’ target price 3% to A$9.60, held Beach Energy at A$0.80, and cut Woodside by 2% to A$32.50 and Karoon Energy by 14% to A$1.80.
1. Outlook and targets
Citi sees free cash flow growth from Santos’ Barossa and Pikka projects, while Woodside is positioned to benefit from high global gas prices as investors focus on Scarborough commissioning. It said operational delivery remains a debate for smaller companies, noted Karoon’s discount after disruptions at its Bauna plant, and said Beach may beat September-quarter production but needs to demonstrate operational strength at Waitsia. The Australian energy sub-index was down 0.4% at the last close and up 29.1% year to date.
