Beach Energy's FY20 underlying net profit of $416m was in-line with Morgans forecast.

The company announced drilling is planned to commence in the offshore Otway basin in December as well as an investment decision on Waitsia's second stage expansion. 

Morgans continues to see value in the company with significant upside potential that comes from a strong balance sheet to weather weakness in commodity prices. The announcement of the work done on opening up LNG exports for Waitsia adds upside to the analyst's assumption of simply receiving domestic WA gas prices if LNG prices exceed netback (a measure of an export parity price that a gas supplier can expect to receive for exporting gas)

The Add rating is maintained. The target price is increased to $2.06 from $1.86.

Sector: Energy.

Target price is $2.06.Current Price is $1.58. Difference: $0.48 - (brackets indicate current price is over target). If BPT meets the Morgans target it will return approximately 23% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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