Kiatnakin Phatra Securities (KKPS) has revised the target price for PTT Exploration and Production Public Company Limited (SET: PTTEP), lowering it by 8.3% to THB 155 per share. This adjustment reflects lower oil price assumptions adopted from BofA Global Research, primarily due to the full reopening of the Strait of Hormuz, which has led to a downward revision in KKPS’ net profit after tax (NPAT) forecasts.
For 2026, KKPS has reduced its NPAT estimate for PTTEP by 18% to THB 78.2 billion, while the consensus estimate stands at THB 75.2 billion. This forecast is based on an updated Brent crude oil price benchmark of $82 per barrel, down from the previous $92.5 per barrel.
Looking forward to 2027, the NPAT estimate has also been revised down by 16% to THB 72.9 billion, compared to the consensus of THB 69.3 billion, incorporating a decreased Brent price benchmark of $70 per barrel, revised from the earlier $78.3 per barrel.
Additionally, KKPS has lowered its long-term Brent price assumption from $75 per barrel to $70 per barrel, in line with the current Brent forward curve, which places the long-term price outlook at $70-71 per barrel.
The brokerage maintains a positive view on PTTEP, continuing to regard the stock as one of the top energy sector performers, citing disciplined capital allocation, robust operating cash flow, and a high dividend yield. Oil price forecast remains above pre-conflict levels—$64 per barrel in the fourth quarter of 2025—combined with effective cost control, which is expected to enable PTTEP to generate strong free cash flow.
This financial strength should support the company’s sustained high cash returns for shareholders or provide flexibility for potential inorganic growth opportunities. KKPS has thus reaffirmed a ‘Buy’ rating on PTTEP.
Notably, these revised forecasts stem from BofA Global Research’s commodity team, which has cut its Brent crude forecast for 2026 to $82 per barrel from the previous $93 per barrel. This follows the signing of a memorandum of understanding for the full reopening of the Strait of Hormuz, expected to result in a 2.6 million barrel-per-day deficit in 2026.
Despite an average Brent price of $90 per barrel in the first half of 2026, the outlook suggests prices will fluctuate in the $70-80 per barrel range during the second half. The research team anticipates that oil markets will remain in deficit until the fourth quarter of 2026 due to mine clearing and logistical difficulties in restoring oil flows.
For 2027, the Brent forecast was also reduced from $78 to $70 per barrel, with an anticipated surplus of 1.1 million barrels per day. Factors such as canceled projects in the first half of 2026 and significant restocking demand are likely to lend support to oil prices in 2027, according to BofA Global Research.
