Origin Energy shares (ASX:ORG) moved to a decade high today, as strong earnings growth, reaffirmed outlook from Citi, and the possibility of an extension to the Eraring coal plant operations beyond 2027 have boosted sentiment in the stock.
The company’s robust full-year results, announced recently, revealed an underlying profit of A$1.49 billion, up from A$1.18 billion in the previous year. This substantial increase was primarily attributed to strong performance within the integrated gas division, particularly the Australia Pacific LNG (APLNG) project.
Furthermore, Origin Energy has projected underlying operating earnings for its Energy Markets division to fall between A$1.4 billion and A$1.7 billion for fiscal year 2026, exceeding the A$1.4 billion reported in 2025. This optimistic forecast initially boosted Origin’s share price, reaching A$12.78, its highest level in 10 years.
Following the earnings release, analyst opinions diverged, providing different perspectives on the stock’s forward-looking value.
Bull Case:
- Strong earnings and positive forecast: Underlying profit rose to A$1.49 billion, and the company projects Energy Markets earnings between A$1.4 billion and A$1.7 billion for FY2026, exceeding current performance.
- Positive analyst rating: Citi maintained a ‘buy’ rating with a price target of A$13.00, indicating satisfaction with the company’s performance.
Bear Case:
- Cautious analyst outlook: Macquarie issued a ‘neutral’ rating with a price target of A$11.34, suggesting the stock may be fully valued with a flat outlook for core assets.
- Recent acquisition failure: A major A$15.35 billion takeover bid was rejected by shareholders in late 2023, indicating resistance to what was considered a premium offer and creating uncertainty about corporate action.
The recent surge in Origin Energy’s share price reflects a combination of strong financial performance and evolving market sentiment. While analyst opinions differ on the stock’s valuation, the company’s solid earnings and positive future guidance appear to be driving investor confidence. The stock’s movement today underscores the market’s sensitivity to earnings performance and future outlook.
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