Kiatnakin Phatra Securities has raised its price objective for PTT Exploration and Production (SET: PTTEP) by 6.2% to THB 151.8 per share, prompted by a higher oil price forecast from the Bank of America (BofA) amid ongoing conflict involving the US, Israel, and Iran. The brokerage maintains its BUY rating.
The price objective upgrade factors in an increased Brent crude price deck for 2026-2027—US$77.5/bbl for 2026 and US$65/bbl for 2027—up from previous assumptions of US$60/bbl and US$62/bbl, respectively. The revision reflects expectations that ongoing geopolitical risks could keep energy markets tighter for longer. Kiatnakin Phatra also adjusted its discount rate (WACC) to 8.9% from 10% after Thailand’s equity risk premium (ERP) was reduced from 8% to 7.5%, with the long-term risk-free rate declining to 2% from 4%.
These changes significantly boost earnings estimates for PTTEP: 2026 net profit is now projected at Bt77.4bn, up 24% from prior forecasts and well above the Bt56.4bn consensus, thanks to higher oil prices and stable gas prices (US$5.76/mmbtu) with total unit costs at US$30/bbl. For 2027, net profit forecast rises 4.2% to Bt70.5bn (versus Bt56.9bn consensus), with similar cost and price structures.
BofA’s base case anticipates a supply deficit of 2.2 million barrels per day in early 2026, normalizing by mid-year and moving to a surplus in the second half. If disruptions extend further, Brent could temporarily spike as high as US$100-130/bbl.
Kiatnakin Phatra remains positive on PTTEP, citing its capital discipline and robust cash flows, supporting an attractive dividend yield. The brokerage sees a 12.7% total return on the stock, combining a prospective 6.5% dividend yield for 2026 and 6.2% implied price upside.
