WorleyParsons (WOR) Stock Recommendation

UBS has reiterated their Buy 2 share recommendation for the WorleyParsons (WOR) stock with a share price target of $24. The stock analysts currently value the company at around $24 to $25 per share on a DCF basis. UBS has observed that:

Foster Wheeler has announced that the FWWP jv has been engaged by WPL to undertake a study for an LNG development based on the Browse gas fields off the north coast of WA. No details as to the scope of the study or the composition of the jv were given. WOR made no announcement, which leads us to believe that this is not material. This suggests to us an early stage technical analysis of development options. Based on the Pluto FEED announcement (28/8/06) we would expect WOR to have around 40% of the jv and the contract value to be less than $100m. Given that WPL has made no contract announcements EPCM work must be two or three years away. The Browse fields hold 20TCF of gas and 300mbls of condensate. Were an LNG facility to be built based on this resource we suspect that it would be more than 10mt at a capital cost of around A$1b/t, which would be a major project by industry standards. This announcement tends to reinforce our view that WOR is capable of executing quite large projects in hydrocarbons.

WorleyParsons Limited is listed on the Australian Stock Exchange (ASX) under stock code WOR. You can view their investor website here. WOR was listed on the ASX on 28 November, 2002. Worley Parsons is a provider of Professional Services to the Energy, Resource and Complex Process Industries. Previous Worley Parsons (WOR) recommendations. Find out the meaning of the recommendations in this primer. Browse for other broker recommendations. Check your charts and good luck with your share trading!