BUZZ - Citi is optimistic about Australian energy companies as commodity prices rebounded in September

October 12 - ** Citi believes there is upside potential for Australian gas companies, driven by the "positive" commodity price environment in the September quarter

** The brokerage expects energy giants Woodside Energy (WDS.AX) and Santos (STO.AX) to achieve double-digit core earnings growth in the 2026 calendar year

** It forecasts growth in free cash flow from STO's Barossa and Pikka projects, notes that Woodside Energy (WDS) is benefiting from high global gas prices, and adds that investor focus remains firmly on the smooth execution of the WDS Scarborough project startup

** It points out that for mid- and small-cap stocks, market debates still center on operational execution

** Karoon Energy (KAR.AX) is currently trading at a discount due to disruptions at its Baúna plant

** The brokerage expects Beach Energy (BPT.AX) to exceed production expectations in the September quarter, but says operational strength at its Waitsia plant needs assurance

** It raises STO's target price (TP) by 3% to AUD 9.6 per share, maintains BPT's target price at AUD 0.8 per share, cuts WDS's target price by 2% to AUD 32.5, and lowers KAR's target price by 14% to AUD 1.8 per share

** As of the previous trading day's close, the energy sub-index .AXEJ fell 0.4%, and has gained 29.1% year-to-date

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