DeepSeekHere’s a summary of Jefferies' initiation of coverage on...

DeepSeek

Here’s a summary of Jefferies' initiation of coverage on Origin Energy (ORG) with a Buy rating, focusing on its position in the energy transition:

Key Points from Jefferies' Analysis:

1. Buy Rating & Price Target:

   • Jefferies assigned a Buy rating with a price target of A$12.05, representing an 11.8% upside from ORG's last close at the time of the report 135.

   • This contrasts with the broader analyst consensus, which averages a neutral rating and a A$10.50 price target (some forecasts range from A$9.33 to A$12.05) 4810.

2. Rationale for Buy Rating:

   • Diversified Business Model: ORG is well-positioned to manage the energy transition, with strengths in both traditional and renewable energy assets 1.

   • Octopus Energy Stake: Jefferies highlights ORG's stake in UK-based Octopus Energy as a key growth driver, providing exposure to global energy technology (e.g., Kraken platform) and retail expansion. Though Octopus is expected to report losses in FY25, positive earnings are projected from FY26 onwards 112.

   • Australia-Pacific LNG Project: Seen as a long-duration, high-value asset supporting cash flows 1.

3. Market Context:

   • ORG shares were down 1.1% YTD at the time of the report, underperforming the ASX Energy sector, which recently surged due to geopolitical tensions 111.

   • Recent volatility included a 4% drop in May 2025 after Octopus Energy revised its FY25 EBITDA guidance to a loss of up to A$100M (vs. prior breakeven expectations) due to warm UK weather and one-off subsidies 12.

4. Broader Analyst Sentiment:

   • While Jefferies is bullish, other brokers like Morgan Stanley (Sell) and Goldman Sachs (Hold) express caution, citing regulatory risks and slower earnings growth 810.

   • Citi (Buy) and RBC Capital (Hold) note ORG's valuation appeal but remain neutral on near-term catalysts 8.

5. Financial Outlook:

   • EPS Estimates: Next quarter EPS is expected at A$0.37, down from A$0.54 in the prior quarter 410.

   • Revenue Forecast: A$8.36B for the next quarter, with FY25 revenue growth projected at 4.75% 1012.

Conclusion:

Jefferies' optimism centers on ORG's transition capabilities and long-term growth via Octopus Energy and LNG assets. However, mixed analyst views and near-term headwinds (e.g., Octopus losses) suggest volatility. Investors should weigh these factors against the A$12.05 price target