Morgan Stanley has added PTT Exploration and Production (SET: PTTEP) to both its Asia Pacific ex-Japan (APxJ) and Global Emerging Markets (GEM) Focus Lists, signaling a renewed push to gain energy sector exposure. Analyst Mayank Maheshwari carries an Overweight rating on the stock.
Central to the bullish thesis is an anticipated revival in volume growth. Morgan Stanlet forecasts PTTEP’s production volumes to expand at approximately 6% annually between 2026 and 2028, driven by a combination of organic project development and the gradual contribution of recent acquisitions. In the near term, new Thai concessions are expected to provide the initial catalyst for growth, with inorganic assets — those acquired through external deals — seen picking up the baton and contributing more meaningfully in 2027 and 2028.
On the macro side, the team points to tightening oil markets as a supportive backdrop, with the benefits of higher oil prices seen steadily flowing through to PTTEP’s earnings. Adding to the positive picture, the company’s gas prices have also stabilized after a period of volatility, reducing a key source of uncertainty for investors.
From an income perspective, PTTEP’s decision to raise its dividend payout ratio to approximately 60% in 2025 stands out as a noteworthy development. Morgan Stanley believes this elevated payout level is sustainable, and the resulting dividend yield of around 5% compares favorably against global energy peers — a meaningful draw for yield-seeking investors in the current environment.
Perhaps most compelling is the team’s valuation argument. Morgan Stanley believes the market is currently pricing PTTEP as though only cash flows from its proven (1P) reserves matter, leaving significant upside on the table.
