Latest news with #SimonWatkins
Yahoo
27-05-2025
- Business
- Yahoo
Do National Grid shares look like they're worth me buying at just under £11 after 2024/25 results?
National Grid (LSE: NG) shares are close to their 23 April post-rights issue high of £11.03. This involved the right to buy seven shares for every 24 held and ended on 10 June last year. By then, the multinational electricity and gas utility giant had secured £7bn in new funding. The current high share price may indicate that little value remains in the stock. But it may result from the business being worth more now than it was before. To find out which is true, I took a deep dive into business and ran the key numbers. The firm's full 2024/25 fiscal year results saw operating profit jump 10% to £4.934bn. Profit before tax leapt 20% to £3.65bn. And earnings per share (EPS) increased 8% to 60p. On the expenses side, capital investment geared to government-regulated infrastructure expansion rose 20% to £9.847bn. This is part of National Grid's plans to complete around £60bn of such investment in the next five years. Looking ahead, it forecasts an EPS compound annual growth rate of 6%-8% to fiscal year 2028/29. It is earnings that drive a firm's share price and dividend higher over time. National Grid currently trades at a price-to-earnings ratio of 18.9 compared to its competitors' average of 13.5. These consist of at 8.9, Engie at 11.3, Enel at 12, and Iberdrola at 21.7. So the UK power firm is significantly overvalued on this measure. The same is true of its 2.9 price-to-sales ratio against its peers' average of 1.1. However, on the price-to-book ratio it is undervalued at 1.4 compared to its competitors' average of 2. I ran a discounted cash flow analysis to get to the bottom of the valuation. This shows National Grid shares are 23% undervalued at their present £10.89 price. Therefore, their fair value is £14.14, although various market forces could move them lower or higher. One of the previous advantages for owners of National Grid shares was its good yield. In 2023 and 2024 this averaged around 5.5%. However, in the latest results the full-year dividend was just 42.72p compared to 2024's 58.52p. This gives a yield on he current share price of just 4.3%. Moreover, analysts forecast this will remain about the same in the next three years. Reducing dividends is a red flag for me in my experience as a former senior investment bank trader and longtime private investor. Government-mandated spending on infrastructure is nothing new for big national power firms. But £60bn over five years looks a lot to me, given National Grid's already sizeable debt. Specifically, it has a net debt-to-equity ratio of 5.9 compared to the 3 or less considered healthy. Given this debt risk, I do not think the 23% undervaluation on the share price makes National Grid shares worth buying for me. The post Do National Grid shares look like they're worth me buying at just under £11 after 2024/25 results? appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Simon Watkins has no position in any of the shares mentioned. The Motley Fool UK has recommended National Grid Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025
Gulf Insider
23-05-2025
- Business
- Gulf Insider
Iraq Seals Major Oil Deal With Chinese Company
Iraq's government has signed a deal with Chinese Geo-Jade Petroleum to expand production at the Tuba oil field, build a refinery and two power plants. Per an AFP report, the deal will also involve the construction of a petrochemicals facility and a fertilizer plant. The refinery that Geo-Jade Petroleum will build will have a capacity of 200,000 barrels daily. One of the power plants will have a capacity of 650 MW and the other, a solar power facility, will have a capacity of 400 MW. 'These projects with Geo-Jade represent a big leap in the development of Iraq's oil wealth and supporting of the national economy,' Iraq's oil minister, Hayan Abdel Ghani, said, adding that the deal would create thousands of jobs. Geo-Jade Petroleum already operates in Iraq – it is in charge of the Khana field, which is slated to begin expanded production in 2026. Chinese companies as a whole have built a solid presence in OPC's number-two, driven by Beijing's strategy to expand supply availability through both domestic and international investments. To date, more than a third of Iraq's proven oil and gas reserves and as much as 66% of production are under the management of Chinese firms, Simon Watkins reported earlier this year. The Iraqi government's ambition to boost production significantly, to as much as 7 million bpd, Chinese companies are among the best placed to take advantage of the opportunity. Currently, Iraq produces around 4 million barrels daily—above its OPEC+ production quota, which has created tensions with OPEC's number-one, Saudi Arabia. Chinese companies' entry into Iraq's oil and gas sector is a result of an agreement inked back in 2019 and dubbed 'Oil for Reconstruction and Investment', under which Chinese companies are granted entry into Iraq's energy infrastructure sector as investors in return for oil supplies.
Iraq Business
15-04-2025
- Business
- Iraq Business
Chinese Firms respond to Iraq's 7m bpd Oil Goal
By Simon Watkins for the Any opinions expressed are those of the author(s), and do not necessarily reflect the views of Iraq Business News. Iraq's 7 Million bpd Oil Production Goal Draws Swift Response from Chinese Firms The recent reiteration by Iraq Oil Ministry of a 7 million barrels per day (bpd) oil production target within the next five years has spurred activity among Chinese firms that continue to dominate the country's oil and gas sector. Click here to read the full report. Tags: Basra Gas Company, Belt and Road Initiative (BRI), BGC, China, China HuanQiu Contracting & Engineering Corporation (HQC), China National Petroleum Corporation (CNPC), China Petroleum Engineering Construction Company, Common Seawater Supply Project (CSSP), CPECC, Donald Trump, ExxonMobil, featured, France, Hilong, Iraq Oil Production News, Iraqi Drilling Company (IDC), Kirkuk Oilfields, Majnoon, PetroChina, Rumaila, TotalEnergies, United States, West Qurna Oilfield News, Zubair
Iraq Business
06-04-2025
- Business
- Iraq Business
Can Iraq's Gas Projects Survive Trump's Iran Crackdown?
By Simon Watkins for the Any opinions expressed are those of the author(s), and do not necessarily reflect the views of Iraq Business News. Can Iraq's Gas Projects Survive Trump's Iran Crackdown? With US waivers on Iranian energy imports revoked, Iraq is under pressure to rapidly develop its own non-associated gas fields.. Click here to read the full report. Tags: Electricity In Iraq, gas production, Iran, sanctions
Yahoo
22-03-2025
- Business
- Yahoo
A £10 Rolls-Royce share price! How soon might that happen?
The Rolls-Royce Holdings' (LSE: RR.) share price spike on results day at the end of February took me by surprise. After what the company has achieved in its recovery, I was expecting something good. But not that good. Have you ever thought that waiting for a share price to fall and give us a better buying opportunity might sometimes be a bit silly? Well, that's what I was doing. And with hindsight, silly is exactly how it looks now. I'd have done better if I'd remembered billionaire investor Warren Buffett's words: 'It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.' He said that as long ago as 1989. You'd think I might have learned by now. With Rolls-Royce shares hovering close to the £8 level, at the time of writing, is it realistic to hope for £10 any time soon? There are some experts out there who seem to think so. In early March, investment bank UBS reiterated its Buy recommendation on the stock. And it lifted its target price to exactly what we're talking about, bang on £10. That's a further 25% gain on top of the 40% year-to-date climb we've already seen in 2025. In fact, the range of broker price targets reaches as high as £11.50 in one case, with a majority of forecasters rating the stock a Buy. But there's always one party pooper, isn't there? In this case it's Berenberg, with a Sell rating and a price target of a tiny 240p. Yes, it expects the Rolls-Royce share price to crash 70%. And it's not just an out-of-date rating either, as we often see. No, Berenberg repeated its Sell stance on results day. That lowball call drops the average price target to only about where the stock is now. But the wide range shows that using just that figure really doesn't tell us much. I'll tell you one expert whose views I value above these City folk with their short-term horizon. It's my Motley Fool colleague Simon Watkins. Simon's a whizz when it comes to discounted cash flow analysis. That's a technique that estimates the future stream of cash expected from an investment, and works out what it could be worth today. On that basis, he believes Rolls shares could be undervalued at anything up to around £12.40. Whether it works out like that in practice will depend on a lot of things, not the least of which is the dependability of forecasts. But it can be an objective way to try to cut through the hype that so often clouds the headlines. So might the share price reach £10? Based on fundamentals and forecasts, I really do see a good chance of it, although it isn't guaranteed and it could go in the opposite direction. In the short term however, I think sentiment could send it either way, even against the current momentum. Still, I reckon anyone who can put that aside could do well to consider Rolls-Royce for its long-term potential. The post A £10 Rolls-Royce share price! How soon might that happen? appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has recommended Rolls-Royce Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025 Sign in to access your portfolio
