In our "Louisiana Blues" note dated 24 May, we advised that the market reaction to the news there would be a $1 billion cost overrun on the Lake Charles Chemical Project in the United States was excessively negative. We concluded that for traders and longer run investors the fall in the share price, to R352 at the time the note was issued, offered opportunity. This has been a profitable call as the stock is now R380, an 8% increase. The stock remains blow our fair value and target price. Recent oil price weakness won’t alter our earnings estimates unless Brent dips below $60/bbl for a prolonged period. We update our analysis following recent developments in the energy sector.
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