Tag: ASX:CTX

Since posting a two-year high of $37.00 on February 27th, shares of CTX have dropped close to 12% to reach $32.60 in early trade today.

Much of this down move has been in response to its full year results, which saw operating profits only marginally rise above their guidance.

We sold the May $36.00 calls for shareholders on February 28th for $1.00.

Those calls are worth about 35 cents today and investors will get paid the 61 cent dividend.

We don’t currently have a buy signal for CTX. However, based on the recent price action above the key support area of $31.50, we expect to see one soon.

CalTex

Caltex FY17 earnings came in at the top end of the estimated range, at $620 million.

Caltex will announce the outcome of their asset review at the end of June.

We expect to see commentary around divestment of station freehold land, which should be a net positive for share holders.

FY19 outlook for revenue is 2% growth to $23 billion, EBIT $930 million , EPS $2.40 and DPS $1.20, placing the stock on a forward yield of 3.5%.

We consider CTX fully- valued at the current price range.

After buying at lower prices and selling the May $36 calls for $1.00 credit, we’ll be pleased to collect the upcoming dividend of 61 cents on March 12th, and then deliver the stock in May.

CTX’s 1H17 group NPAT was A$307 million vs guidance of A$290-310 million.

EBIT of A$470 million was also inline with company guidance of $450- 480 million.

FY18 EBIT will remain flat as the company works to reduce costs to off-set losses from the lost WOW supply agreement.

We have Caltex trading on a  forward yield of 3.8%.

We continue to hold Caltex in our model portfolio with an upside target of $33.00.

FY17 refining margins have improved from last year after averaging US$12.40 versus US$10 over 1H16. 

We expect  CTX stock price to find support at the current price level and trade higher off the back of the earnings result announced in August.

Assuming DPS of $1.15, we have CTX on 3.7% yield, and when complimented with a covered call, we ‘re delivering 10 – 12% annualised cash flow.

The price of WTI Crude Oil hit a 7-month low of $42.75 in New York trade last night. As a result, shares of CTX have opened 1.5% lower near $31.20.

Last week we suggested that clients take profits in CTX long positions in the $34.00/25 area.

We will look to re-enter long positions for a reversion move higher back into the $34.00 area over the medium-term.

Caltex