Top broker forecasts 14% upside for this battered ASX 200 energy stock

Down 30% since April, this leading broker sees brighter days ahead for the ASX 200 energy stock.

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Following on a six-month run higher, shares in S&P/ASX 200 Index (ASX: XJO) energy stock Ampol Ltd (ASX: ALD) have been in sharp decline since early April.

How sharp?

Well, at yesterday's closing price of $28.95, the Ampol share price is down 29.87% since the market close on 5 April.

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The ASX 200 energy stock came under additional selling pressure at the end of April after reporting its quarterly results. Among the headwinds from those results was a 7.3% year-on-year decline in Ampol's refinery production, which fell to 1,381 ML for the three-month period.

But Jeffries believes that the worst is over for Ampol.

The broker raised Ampol to a buy rating with a $33 target price. That's 13.9% above yesterday's closing price.

What's the latest from the ASX 200 energy stock?

As you're likely aware, Ampol supplies Australia's largest branded petrol and convenience network. The company also refines, imports and markets fuels and lubricants.

What you may not be aware of is that the ASX 200 energy stock reported its half-year results on 19 August.

While the company's sales volumes for the six-month period increased by 15.2% year on year to 13.25 billion litres, revenue from ordinary activities declined 1.1% to $18.24 billion.

Group statutory net profit after tax (NPAT) soared 197.3% compared to the prior corresponding half to $235.2 million. However, this dramatic statutory profit increase was mostly due to much smaller inventory losses.

As Motley Fool writer Mitchell Lawler noted on the day, "In 1H 2023, Ampol recorded a $220.1 million hit to its books, whereas this time around, it's only $21.1 million."

Which explains why, despite the big profit boost on paper, the interim fully franked Ampol dividend of 60 cents per share was down 36.8% from the prior interim dividend.

Still, with a full-year passive income payout of $2.40 a share, the ASX 200 energy stock trades on a juicy, fully franked, trailing dividend yield of 8.3%.

With the Ampol share price tumbling over recent months, the company's price-to-earnings (P/E) ratio has also fallen to just 9.8 times.

As for the balance sheet, Ampol reported net borrowings at 30 June of $2.56 billion. The company's liquidity position remains solid, with committed facilities of $5.2 billion.

The ASX 200 energy stock could also benefit as its Brisbane-based Lytton refinery returns to normal operations following upgrade work.

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