Karoon Energy's acquisition of a minority non-operated interest in Who Dat (Gulf of Mexico) for -US$720m, and associated US$300m capital raising, will be earnings and value dilutive, assesses Morgans.

The quality of the assets upgrades Karoon's fundamentals, in the broker's view, with the 10-year earnings outlook improving markedly, which should support a higher multiple.

The target drops to $3.00 from $3.30. Add.

Sector: Energy.

Target price is $3.00.Current Price is $2.16. Difference: $0.84 - (brackets indicate current price is over target). If KAR meets the Morgans target it will return approximately 28% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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