ORIGIN ENERGY LIMITED (ORG)
Share Price Analysis and Chart

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18/08/2025

1

Buy

$13.70

10.75%

After further analysis of Origin Energy's FY25 result, UBS believes there's scope for Octopus' value realisation over the coming 6-12 months.

Potential financial separation of Octopus Energy Retail and Kraken is expected to happen in 1H26 but the company may need to contribute equity, and has capacity to do so. The stock could re-rate from Kraken's value realisation.

FY26-27 EPS forecasts trimmed by -2-4% mainly on higher interest costs and D&A, while FY28-30 forecasts lifted by 14-30% on higher electricity prices and higher output from Eraring power station. 

Target rises to $13.70 from $11.70

In the first take, the broker noted the following:

Origin Energy reported a "solid" 2H25 result on first take, with FY26 energy markets earnings (EBITDA) guidance in line and a robust balance sheet offering scope for the utility to support dividends and fund growth, according to UBS.

Many of the main financial metrics were pre-released, with the broker suggesting the market will focus on FY26 expected earnings from energy markets. Origin's share of Octopus FY26 earnings (EBITDA) is guided at levels slightly below consensus.

UBS will be focusing on any upside potential and value from the Octopus stake. The report suggests investors will be looking for the next growth lever to drive the stock higher after a 19% total return over the last year.

FORECAST
UBS forecasts a full year FY26 dividend of 61.00 cents and EPS of 56.00 cents.
UBS forecasts a full year FY27 dividend of 61.00 cents and EPS of 70.00 cents.

Broker commentary and detailed analysis is available for Full Members Only.
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18/08/2025

3

Neutral

$11.70

-5.42%

Jarden assessed Origin Energy's FY25 result to be broadly in line and therefore thinks the strong share price reaction was a bit overdone.

Underlying EBITDA was in line with the broker's forecast and the consensus, though underlying net profit was 4% ahead of the broker's forecast and 1% ahead of the consensus.

FY26 EBITDA guidance for energy markets was $1.4-1.7bn which was $300m higher than initial guidance for FY25, but -3% below the broker's estimate. APLNG guidance was unchanged vs July update, and Octopus' performance was below the broker's forecast.

The broker lifted FY26 EPS forecast by 6.5% and FY27 by 7.4% on higher energy market EBITDA and lower forecast depreciation.

Neutral. Target price $11.70.

FORECAST
Jarden forecasts a full year FY26 dividend of 60.00 cents and EPS of 75.90 cents.
Jarden forecasts a full year FY27 dividend of 60.00 cents and EPS of 80.00 cents.