Woodside Energy shares (ASX: WDS) offered some relief to investors after a period of decline. The uptick follows stabilization in oil prices, a key driver for the energy giant’s performance.
The Woodside share price closed 2.79% higher to reach A$23.59 by the end of the week. This reverses some of the negative momentum seen recently, with the stock having fallen 5.26% over the past month and 7% over the past year, with oil prices doing little to help. Today’s reprieve reflects market sensitivity to fluctuations in commodity prices, and a degree of optimism that the downside may have been priced in.
Woodside’s recent financial performance has been mixed. The company’s first-half 2025 net profit after tax saw a 24% decline to $1.25 billion, primarily due to lower realized oil prices, which averaged $61.8 per barrel, down from $62.6 per barrel the previous year, and increased depreciation costs related to the Sangomar project in Senegal. However, full-year 2024 profit more than doubled, reaching $3.57 billion, a 115% increase from the previous year, driven by higher production volumes. The company maintained a strong dividend payout, declaring a final dividend of US53 cents per share.
Strategically, Woodside has been active in expanding its LNG portfolio. The company’s agreement to acquire Tellurian, a U.S.-based LNG developer, for $1.2 billion, including the Driftwood LNG project, is expected to bolster its position in the U.S. LNG market. According to Woodside, this acquisition will position the company as a global LNG leader.
Analyst sentiment remains divided. Macquarie Research reaffirmed a Neutral rating with a price target of AUD26.00, noting that Woodside’s 2024 EBITDA and NPAT aligned with their expectations. However, Citi downgraded the stock to Sell with a lowered target of AUD24.50, citing valuation concerns following a recent stock price increase, revised expectations for near-term dividend payouts, and uncertainties regarding potential mergers and acquisitions.
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Bull Case:
- Acquisition of Tellurian expands LNG portfolio.
- Strong full-year 2024 profit and dividend payout.
- Macquarie maintains a neutral rating with a $26 target.
Bear Case:
- Citi downgraded to Sell with a $24.50 target.
- First-half 2025 profit declined due to weak oil prices.
- Stock hit a 52-week low in December 2024.
Today’s gains in Woodside Energy shares provide a welcome respite for investors heading into the weekend, however mixed analyst ratings, fluctuating oil prices, and the integration of acquisitions will likely contribute to share price volatility in the near term. A stabilisation, or move higher for oil in light of potential concerns over supply from Venezuela, Iran, Iraq, and Russia could be the catalyst needed for WDS to shift momentum more materially.
