Worley shares have closed out the day having added 1.46%, bringing the cumulative 1 month gain to an impressive 11.09% as sentiment shifts in the stock. The company has experienced an uplift in bullish sentiment following an analyst upgrade and the secured financing for Venture Global’s CP2 LNG project, a significant development for the company’s future revenue streams. The upgrade reflects increased confidence in Worley’s backlog and earnings potential tied to this major project.
RBC Capital analyst Gordon Ramsay upgraded Worley to “Outperform” from “Sector Perform,” raising the price target to A$18.50 from A$18.00.
Ramsay highlighted the anticipated material revenue contribution from Worley’s involvement with Venture Global’s CP2 LNG project. This multi-year contract is expected to translate into revenue as work transfers from the sales pipeline to the backlog, although full-scale construction is not expected until late 2026.
JPMorgan, on the other hand, adjusted its price target for Worley downwards to A$16.45 from A$17.70 on August 22, while maintaining a bullish “Overweight” rating. This adjustment reflects expectations of slower growth in global capital expenditure across the Energy, Chemicals, and Resources sectors. JPMorgan projects Worley’s revenue growth at 3% in FY26 and 8% in FY27, below market consensus estimates.
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Despite this, the firm views Worley’s valuation, strong balance sheet, and diversified project backlog favourably.
Worley’s half-year 2025 financial results, announced on February 26, 2025, revealed a 55.4% increase in statutory net profit to $216 million and a 9% growth in underlying EBITA to $376 million. The company declared an interim dividend and announced a $500 million share buy-back program.
Worley’s management indicated that well-capitalized customers are proceeding with projects as planned, with no significant cancellations or deferrals. The company’s backlog increased to $13.0 billion by the end of March 2025, with bookings for the first nine months of FY25 reaching $9.4 billion, up 22% year-on-year.
Bull Case:
- CP2 LNG project provides substantial revenue boost.
- Strong financial performance with increased profit and EBITA.
- Robust backlog and strategic initiatives drive growth.
Bear Case:
- Slower capex growth may impact revenue projections.
- JPMorgan reduced price target due to capex concerns.
- Full-scale CP2 construction delayed until late 2026.
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