Woodside Energy (ASX:WDS): Assessing Valuation After Landmark Nine-Year LNG Supply Deal With Turkey's BOTAS

Woodside Energy Group (ASX:WDS) made headlines after signing a long-term Heads of Agreement to supply LNG to Turkey’s BOTAS for up to nine years, with most of the supply coming from its Louisiana LNG project. This partnership represents a significant commercial milestone for Woodside and reinforces the company’s focus on global LNG demand as market discussions continue regarding future supply dynamics.

See our latest analysis for Woodside Energy Group.

Woodside’s share price has stayed relatively muted around A$23.00 this year, even as the company announced its major LNG supply deal with Turkey’s BOTAS and global headlines pointed to both opportunity and emerging risks in the sector. While long-term total shareholder return is solid, delivering nearly 79% over five years, recent momentum is subdued, and investors seem to be weighing growth potential against market concerns about oversupply and shifting energy dynamics.

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This leads to a key question for investors: Is Woodside undervalued given its solid long-term returns and major new deals, or is the market already reflecting future growth in its muted share price?

Most Popular Narrative: 13.9% Undervalued

With the most widely followed narrative placing fair value at A$26.70, Woodside's last close at A$23.00 points to a notable upside. This highlights the difference between analyst assumptions and current market sentiment.

Confidence in LNG's role as a "transition fuel" may be overextended. Forward multiples reflect a belief that natural gas will retain a central place in energy mixes for decades, but acceleration in renewables, alternative molecules (like green hydrogen), and stricter environmental regulations could erode LNG's market share faster than forecast, pressuring long-term revenue and margin assumptions.

Read the complete narrative.

Want to know what’s really driving this valuation? The narrative hinges on bold projections for LNG's global demand and the bet that Woodside stays at the top, even as disruptive forces gather. Unpack the intriguing financial forecasts and the hidden assumptions about future profitability. Your perspective might just change.

Result: Fair Value of $26.70 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, robust global LNG demand and disciplined project execution could support higher revenues for Woodside and challenge these more cautious forecasts.

Find out about the key risks to this Woodside Energy Group narrative.

Build Your Own Woodside Energy Group Narrative

If this perspective doesn’t match your take, or you’d rather dig into the numbers yourself, you can shape your own narrative in just a few minutes. Do it your way

A great starting point for your Woodside Energy Group research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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