"In the nearer term, our 2017 EPS forecast falls to AUD 0.22 from AUD 0.28, due to a decline in Brent crude price expectation to an average USD 53 per barrel from USD 56 prior."
Firstly, the 4 month lag between poo and LNG price is not true. You just need to compare the Q1 realised price ($57.6) with the Q4-2016 poo (in the $40s). The realised poo has a better correlation with spot poo than with the pre 4-month poo.
Secondly, drop the poo expectation to $53 is probably too bearish with consideration YTD realsied price and current poo.
STO Price at posting:
$4.24 Sentiment: Buy Disclosure: Held
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