Woodside Petroleum's underlying profit beat Morgans by 3%. A "healthy" final dividend of US$1.05 was announced, but there is some uncertainty around whether Woodside will pull back the payout ratio to 50% from 80% during its next capex phase.

The broker maintains a conviction view that the merger with BHP Petroleum is a transformative deal that will vastly enhance Woodside's fundamentals, and represents material valuation upside risk to current consensus.

The broker makes only minor adjustments to forecasts. Add retained, target falls to $30.35 from $30.55 on a valuation roll-forward.

Sector: Energy.

Target price is $30.35.Current Price is $27.60. Difference: $2.75 - (brackets indicate current price is over target). If WPL meets the Morgans target it will return approximately 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

© 2022 Acquisdata Pty Ltd., source FN Arena