ASX:WOR
Worley Ltd
Investment Summary
The fund managers believe Worley Ltd is well-positioned to benefit from structural tailwinds in global energy markets, particularly as the world accelerates its shift toward cleaner energy sources. In their opinion, Worley stands out as one of the few global engineering consultancies capable of capitalising on the substantial investment expected in hydrogen, carbon capture, and renewable energy. While the company has historically been viewed as a traditional oil and gas services provider, the managers note that Worley is in the early stages of a significant transition, positioning itself as a key enabler of the energy transition. They believe this transformation is increasingly being recognised by the market. Furthermore, recent strong financial results and a robust outlook reinforce their confidence in Worley’s growth potential, underpinned by both recovery in conventional energy capital expenditure and expanding opportunities in green energy. Alpha Plus, in particular, highlights additional catalysts such as self-help initiatives, a supportive regulatory backdrop, and the company’s improved capital management, including the commencement of share buybacks. In their view, the stock remains undervalued, trading at a discount to the broader market despite its improving fundamentals. Collectively, the fund managers see Worley as a strategically important and financially resilient company poised to benefit from long-term energy trends.
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Manager
L1 Capital
Date
31 July 2023
Price
$17.36
Medium
Monthly Report
Commentary
L1 Capital Long Short Fund continues to hold its position in Worley, which saw a 10% rise in shares over the quarter, driven by positive sentiment surrounding energy capital expenditure and major project wins. Worley stands out as one of the few global engineering consultancy firms well-positioned to capitalize on the ongoing energy transition, benefiting from significant investments in hydrogen, carbon capture, and renewable energy. Despite the market still viewing Worley as a legacy oil and gas engineering contractor, L1 Capital believes the company is in the early stages of pivoting to "green" energy opportunities. The firm’s critical role in supporting the energy transition is expected to drive substantial long-term growth.
L1 Capital
Date
30 Sept 2023
Price
$17.50
Medium
Quarterly Report
Commentary
L1 Capital Long Short Fund continues to hold its position in Worley, following a 10% rise in shares after the company reported strong FY23 results and provided an optimistic outlook for FY24. Worley is benefiting from multi-year revenue growth tailwinds driven by the recovery in conventional energy capex, increased spending in energy transition projects, and successful execution of major project wins secured over the past year. The company is in the early stages of pivoting toward green energy opportunities, positioning itself as a key player in the energy transition. L1 Capital believes the market is beginning to recognize that Worley is no longer just a legacy oil and gas contractor but has evolved into a diversified engineering company critical to supporting the transition to green energy.
Ten Cap
Date
28 Feb 2025
Price
$15.22
Medium
Monthly Report
Commentary
Alpha Plus has updated its investment thesis in Worley Ltd (WOR), adding the company to its portfolio as confidence in its earnings profile strengthened. Alpha Plus continues to hold Worley because it sees meaningful upside driven by self-help initiatives and a supportive regulatory backdrop, particularly in the energy transition space. The fund manager highlights the company’s current valuation—trading at a 15% discount to the ASX 200, compared to its historical 5% premium—as offering an attractive entry point. Additionally, Worley’s initiation of share buybacks for the first time underscores its solid capital position and signals management’s confidence in the business outlook.
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.