BG Group Share Discussion Threads

[apsis2] 02/11/2012 15:42

Our view: BG's Groups strong set of financial numbers, led by a significant jump in operating profit, were marred by an unexpected cutting back of production guidance for 2013, due to a number of delays to project start-ups. Markets had estimated an output growth figure of 10% to 13% in 2013, and hence the flat reading for 2013 led to almost 23% plunge in stock price in the last two days. However, the company still remains fundamentally strong and is on the path to achieve growth especially in the LNG business, which has already witnessed a 24% growth in profits. Prospects in Australia are still strong, while for Brazil, although delayed until next year, also seem very positive. CEO Sir Frank Chapman reckons that its projects in Brazil and Australia each have the potential to generate earnings greater than the current earnings of the group as a whole. Furthermore, BG, which was struggling to fuel growth with its high-deBT balance-sheet position, is in the process of selling assets in the Queensland Curtis LNG project in Australia for US$1.93bn. This, together with previously announced asset disposals, is expected to release cash of $7.6bn by mid-2013. The large decline in stock price yesterday makes it available at attractive valuations. We have a buy on this stock.

[hugepants] 02/11/2012 15:27

How does the discount to assets argument compare with the likes of BP or Shell? Id expect the value of the individual assets for these 2 companies also greatly exceeds market cap (or am I wrong?). Both of these yield 3-4 times as much as this and are on a far lower PE.

[mikejay] 02/11/2012 15:19

philanderer, Sell cut your losses before its to late.

[the bear man] 02/11/2012 15:18

as they say, it is very dangerous trying to catch a falling knife. that so-called asset value can simply dissipate into thin air!

[philanderer] 02/11/2012 14:42

Yep, it`s brilliant how they get it right down to the exact 1p :-D

[the bear man] 02/11/2012 14:35

net asset value at £19.74 per share. lol.

[via con] 02/11/2012 13:00

FWIW

Morning philanderer, as I pointed out yesterday, I knew there´d be some T/O speculation from some broker/anal.yst - they´re so predictable

"Some analysts saw BG's resource base as remaining attractive to predators, with Nomura Securities putting the net asset value at £19.74 per share. "If the current BG management team (or one with a new chief executive) is unable to unlock that value, there will be an industry buyer which believes it can," it said" FT

" there will be" hum, they never use a conditional these types, they always speak with certainty, overpaid uninciteful squibblers imho.

BTW philanderer thank you for the posts over the last few days, most informative.

GLTA

[philanderer] 02/11/2012 12:49

Afternoon TBM

I reckon the BG Group PR machine will be working overtime to get some sort of 'positive spin' for weekend press coverage.

Got one helluva job on their hands ;-)

[the bear man] 02/11/2012 12:36

the FT story that someone posted a link to on one of these threads yesterday said the premium valuation to the sector looks entirely unwarranted. if they traded in line with BP and shell, what would the share price be?

[philanderer] 02/11/2012 11:45

..more from Canaccord....

Analysts were busy cutting their forecasts although some brokers, including Canaccord Genuity, thought the share price reaction had been overdone.
"We can see a recovery in the stock into the £12 to £13 range in the coming months, but more significant upside may be harder to come by yet," Canaccord said.


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Detail from that HB Markets 'buy'

Our view: BG's Groups strong set of financial numbers, led by a significant jump in operating profit, were marred by an unexpected cutting back of production guidance for 2013, due to a number of delays to project start-ups.

Markets had estimated an output growth figure of 10% to 13% in 2013, and hence the flat reading for 2013 led to almost 23% plunge in stock price in the last two days. However, the company still remains fundamentally strong and is on the path to achieve growth especially in the LNG business, which has already witnessed a 24% growth in profits.

Prospects in Australia are still strong, while for Brazil, although delayed until next year, also seem very positive. CEO Sir Frank Chapman reckons that its projects in Brazil and Australia each have the potential to generate earnings greater than the current earnings of the group as a whole.

Furthermore, BG, which was struggling to fuel growth with its high-deBT balance-sheet position, is in the process of selling assets in the Queensland Curtis LNG project in Australia for US$1.93bn. This, together with previously announced asset disposals, is expected to release cash of $7.6bn by mid-2013.

The large decline in stock price yesterday makes it available at attractive valuations.

We have a buy on this stock.

[mikejay] 02/11/2012 11:43

AlphaValue seems to have it right.

[zulu001] 02/11/2012 11:37

Other recent views:
Date Broker name New Price Old price target New price target Broker change
02-Nov-12 Deutsche Bank Hold 1,094.50p 1,102.00p 1,700.00p DownGrade
02-Nov-12 HB Markets Buy 1,094.50p 1,102.00p - Reiteration
01-Nov-12 Macquarie Neutral 1,102.00p 1,950.00p 1,300.00p DownGrade
01-Nov-12 HSBC Overweight 1,102.00p 1,870.00p 1,820.00p Reiteration
01-Nov-12 Jefferies Buy 1,102.00p 1,800.00p 1,700.00p Reiteration
01-Nov-12 Canaccord Genuity Buy 1,102.00p 1,625.00p 1,300.00p Reiteration
01-Nov-12 UBS Buy 1,102.00p 1,620.00p 1,440.00p Reiteration
01-Nov-12 Credit Suisse Neutral 1,102.00p 1,450.00p 1,300.00p DownGrade
24-Oct-12 Barclays Overweight 1,317.50p 1,800.00p 1,800.00p Reiteration
02-Oct-12 Nomura Buy 1,300.00p 1,700.00p 1,700.00p Reiteration
25-Sep-12 AlphaValue Sell 1,263.00p 1,189.30p 1,019.60p DownGrade

[philanderer] 02/11/2012 11:24

Downgrade :

2nd november Liberum 'hold' tp 1230p

(was 'buy'.. 1700p target)

[philanderer] 02/11/2012 09:24

Bit of detail from Canaccord`s note yesterday:

Canaccord cuts BG Group's target price, stays at 'buy'

Gordon Gray, analyst at Canaccord, has cut his target price for gas producer BG Group (BG.L) following Wednesday's production warning, but he retains his 'buy' recommendation, saying the slump in the shares looks disproportionate.

The shares crashed almost 20% after the group announced that it expects no production growth next year - investors had been expecting growth of around 10%.

'BG remains a high growth company, but repeated disappointments on volumes, culminating in yesterday's news flow, have caused severe scepticism over its growth prospects,' Gray said.

'We view the share price reaction to the volume newsflow in itself to be an overreaction, but it reflects this change of focus. We can see a recovery in the stock into the £12-13 range in the coming months, but more significant upside may be harder to come by yet.'

Gray's target price falls 20% from £16.25 to £13. This lower target is based on a lower sum-of-the-parts valuation stemming from the reduced production forecasts on top of a bigger discount given the likely negative sentiment around the shares.

Shares in the group closed at £11.00 on Thursday, down 47.5p or 4.14%.

[philanderer] 02/11/2012 08:55

2nd nov HB Markets buy no tp

retains

[careful] 02/11/2012 08:44

even boring old bg. has collapsed over the last few months.
never understood why it was so expensive.

[u813061] 02/11/2012 08:42

Interesting that the directors aren't buying any shares.

[mikejay] 02/11/2012 08:40

Bear man £7 No.... maybe £10 worse case

[the bear man] 01/11/2012 23:46

The Bear Man 31 Oct'12 - 20:41 - 639 of 663

just remember the old saying- profits warnings come in threes. meanwhile you need the bulls to keep banging the story. anyone out there with targets of £7 or lower?

[philanderer] 01/11/2012 23:08

FT reporting Nomura Securities note..

...Nomura puting BG`s net asset value at £19.74p which would be attractive to an industry buyer if the current management or new CEO is unable to unlock that value.

[philanderer] 01/11/2012 16:03

Funny you should say that BM :-)


2nd november

"..BG Group has not ruled out a further selldown of its Queensland Curtis LNG project at Gladstone after this week's $US5 billion ($4.8bn) deal to sell a 20 per cent stake in the project to China's state-owned National Offshore Oil Corp.

"The deal was revealed on Wednesday night by BG, along with third-quarter earnings that contained a shock downgrade in production forecasts from operations outside Australia that sent the company's share price tumbling 14 per cent in London to the biggest one day fall since listing in the 1980s."

[the bear man] 01/11/2012 14:00

could be looking at more disposals to get that debt down, could be two years with no cash flow

[philanderer] 01/11/2012 13:24

Couple of new ones... and I think Deutsche Bank is the first to keep rating and target unchanged..

1st november Deutsche buy tp 1700p

these others have downgraded...

1st nov Macquarie neutral tp 1300p
1st nov RBC sector perform tp 1360p
1st nov Canaccord buy tp 1300p

[philanderer] 01/11/2012 12:20

Fair points via con but as usual the private investor will be the last to know anything :-)

Luck to you.

[via con] 01/11/2012 12:01

Morning philanderer, as The Bear Man above stated the succession issue is well known but when growth is at issue the long term strategy is also at issue, and in theory a new man/woman at the helm has the abilty to modify /change BG strategy and the longer it takes to get that person the longer it will take to change/modify its medium/long term strategy.

So yes I agree it is "paramount" that BG get its succession issue sorted, and to sort it sooner rather than later, and until then I can´t see where a floor is on this stock unless the usual city boys´ bid rumours start to circulate when a stock has fallen sharply ( which, I venture is another way the city gets itself out of a position in a stock/sector )

GLTA