Ampol's Rally Isn't Slowing Down, Costing it a Bull

Dow Jones
09/02

2226 GMT - Ampol has plenty of tailwinds right now and management is doing well to capitalize on supportive conditions. But the stock is up roughly 1/3 in two months, and Jefferies believes now is the right time to take a breather. "After sharp outperformance, stock is on 16.5x mid-cycle price-to-earnings, making it harder to chase," says analyst Michael Simotas, downgrading Ampol to hold from buy. Jefferies finds all of Ampol's businesses are performing strongly. Geopolitical factors are difficult to predict, but it expects refined product markets to remain tight, supporting continued out-sized cash generation for the foreseeable future. Ampol ended Tuesday at A$43.80, just below Jefferies's A$45.00/share price target.

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