Production and operating cost guidance for FY23 provided at Karoon Energy's strategy day were largely in line with Morgan Stanley's forecasts. The broker notes the next year for the company will be about continuing execution on strategy and potential upside to oil pricing.

The company also noted that mergers and acquisitions were not a priority in the short-term, with the broker commenting that expected strong free cash flow from FY24 would leave Karoon Energy well-positioned for merger and acquisition activity. 

The Overweight rating and target price of $2.10 are retained. Industry view: Attractive.

Sector: Energy.

Target price is $2.10.Current Price is $1.82. Difference: $0.28 - (brackets indicate current price is over target). If KAR meets the Morgan Stanley target it will return approximately 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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