Ampol Limited (ALD)
BUY

ALD - Stock Update

 6 Apr 2022
Sector: Energy

Event spotlight

ALD has tried-and-failed at $32.00 on two occasions over the past 6 months and is indicating to attempt to break resistance a third time. 98% of volume distribution has cleared since the start of last year which gives the indication of very little resistance to the top side. When zooming out to the 10-year chart for it gives an indication on the tension around these levels and the potential opportunities provided from the ZEL deal to break through the resistance.

This is notable given the ZEL shareholder vote last week in favour of being acquired by ALD. Risks remain as the acquisition still requires a sign off from OIO and rubber stamping from the high court. Currently this is presented as simply a formality based on the company’s conversational sentiment although potential risks remain when dealing with regulatory issues.

This vote could be highly beneficial and offers further support to break through this previously attempted resistance. Given transport fuel demand reverts to pre-Covid levels after battling major demand shock and macro impacts, our investment thesis of a BUY rating supports that ALD is potentially one of the more well positioned re-opening plays.

Ampol 1yr price chart and volume distribution

Ampol 1yr price chart and volume distribution

Source: Bloomberg

Ampol 10yr price chart

Ampol 10yr price chart

Source: Bloomberg

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Company overview

Ampol is an Australian petroleum provider which operates in ~1900 sites across Australia.

ALD continues to benefit from post pandemic re-opening which supports our BUY rating. The ZEL acquisition potentially offers a highly accretive opportunity for ALD although risks remain as the deal still needs OIO approval. Alongside this, as the aviation industry returns to post covid levels there is further upside potential.

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