Ampol: Strong Refined Fuel Volumes and Refiner Margins Drive Robust Earnings Uplift

We increase our fair value estimate for no-moat Ampol to AUD 35.00 from AUD 34.50 due to the time value of money. Australia’s largest refined fuel retailer reported strong third-quarter 2023 EBIT of AUD 438 million, up 65% on the previous corresponding period, or PCP. This is largely in line with our expectations and our 2023 EPS forecast of AUD 3.26 is little changed. Our AUD 2.14 DPS forecast is similarly little changed and equates to a healthy 6.7% fully franked yield at the current share price. We still assume a 60% payout for the second half, bringing the full-year payout to 66%.