Beach Energy's FY21 numbers were marginally above Morgan Stanley's estimates though weaker FY22 guidance across production and capex sees the stock under further pressure. It's believed medium-term valuation support is building.

The broker retains its Equal-weight rating though is casting around for a near-term catalyst to drive a re-rate. Target is reduced to $1.25 from $1.50. Industry view: Attractive.

The lower production guidance in FY22 infers the Western Flank will produce near 4mmbbls in FY22 versus just under 8mmbbls in FY20, points out the analyst This is considered a significant decline but on par with the reserves previously reduced.

Sector: Energy.

Target price is $1.25.Current Price is $1.04. Difference: $0.21 - (brackets indicate current price is over target). If BPT meets the Morgan Stanley target it will return approximately 17% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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