Buy one, sell the other: Goldman's take on these 2 ASX energy shares

The top broker outlines its case on Viva Energy stock and Beach Energy shares.

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ASX energy shares are trailing today, with the S&P/ASX 200 Energy Index (ASX: XEJ) down 1.55% — making it the worst-performing market sector — while the S&P/ASX 200 Index (ASX: XJO) is up 0.53%.

Meantime, Goldman Sachs has outlined its case for buying one ASX energy share and selling the other.

Let's see what this top broker has to say about these two stocks.

Buy this ASX energy share for potential 25% uplift

Goldman sees good value in Viva Energy Group Ltd (ASX: VEA) shares, which are trading for $2.88 today, up 0.35%.

The broker has a buy rating on Viva and a 12-month share price target of $3.60. This implies a potential 25% uplift for investors who buy Viva Energy shares today.

In a recent note, Goldman said Viva's 1H FY24 report was in line with its expectations.

It upgraded its rating from hold to buy and trimmed the price target slightly. The broker commented that Viva Energy is at an inflection point for its convenience retail earnings.

While cautious about how long it will take for Viva to transition 80% of stores to a new format following its acquisition of OTR Group in March, Goldman said:

VEA appears well positioned to grow Convenience & Mobility earnings after completing its A$1.2 bn acquisition of OTR in March, targeting over $500m EBITDA by 2029 presenting 18% CAGR from the average earnings over 2021-2023 prior to the acquisition.

Goldman also noted strong near-term refining margin capture, saying:

While regional refining margins remain relatively weak over Q3 to date, VEA's Geelong refinery is running at capacity and able to capture our estimated US$10.7/bbl margin over the next 12 months which we consider strongest within our refining & marketing coverage …

Viva Energy shares have lost 6.2% in value over the past 12 months.

Created with Highcharts 11.4.3Viva Energy Group PriceZoom1M3M6MYTD1Y5Y10YALL6 Sep 202317 Jun 2025Zoom ▾Oct '23Jan '24Apr '24Jul '24Oct '24Jan '25Apr '25Jan '24Jan '24Jul '24Jul '24Jan '25Jan '25www.fool.com.au

…But this energy stock is a sell

Goldman is not so keen on Beach Energy Ltd (ASX: BPT) shares. The Beach Energy share price is currently $1.11, down 1.77%.

The broker has a sell rating on this ASX energy stock with a 12-month price target of $1.44.

The broker said the company's FY24 results were disappointing, and noted production and reserve downgrades and capex guidance increases.

Goldman says there is uncertainty in relation to Otway & Waitsia production and offshore gas capex.

The broker said:

We continue to see risk around Otway production impacted by customer offtake nominations after winter, with consensus production estimates for FY25 currently skewed towards the top end of 17.5-21.5 mmboe FY25 guidance.

We also see risk to higher growth capex than expected for the Offshore Gas Victoria project, currently forecasting A$600m gross remaining for the program over FY26-FY27 with our total net capex estimate ~A$200m net higher than consensus estimates over the period.

This ASX energy share has fallen by 31.5% over the past 12 months.

Created with Highcharts 11.4.3Beach Energy PriceZoom1M3M6MYTD1Y5Y10YALL6 Sep 202317 Jun 2025Zoom ▾Oct '23Jan '24Apr '24Jul '24Oct '24Jan '25Apr '25Jan '24Jan '24Jul '24Jul '24Jan '25Jan '25www.fool.com.au

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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