Morgan Stanley believed that the share price of OR will rise in absolute terms over the next 45 days amid positive momentum in the market.
There are multiple upside triggers from rising mobility, expansion in non-oil offerings and energy transition, according to Morgan Stanely on its view over PTT Oil and Retail Business Public Company Limited (SET: OR).
Balance sheet repair and easing working capital drag with US more than $1 billion recovery in monies from the government and sustainably higher fuel margins after the consolidation of two fuel retailers in Thailand (BCP and ESSO) support a steady margin pick up from 4Q22 run-rates.
Non-fuel retail, mainly OR’s coffee business; Amazon, also continues to do well as new outlets support momentum on cups sold, while margins ses support from recent price hikes in coffee and the return of tourism and mobility.
OR is around 30% underperformance to global fuel retailers in the past year, while valuations are more reasonable amid a dominant fuel market share, growth in non-fuel EBITDA and around 20% cut in street expectations.
Morgan Stanley gave an Overweight rating on OR with a target price at THB26.10 per share.
