Morgan Stanley reminds investors Viva Energy's Geelong Refinery generates around 50% of the company's earnings (EBITDA). As a result, the company's enterprise value is correlated with the Asia Minas Crude Oil 211 Crack Spread.

In research issued yesterday, the broker displayed a graph of the company's market cap versus the crack spread, with both lines showing a high level of correlation. 

The same correlation is evident for Ampol, as its Lytton Refinery generates around 40% of the company's earnings.

Equal-weight. Target $2.99. Industry view is Attractive.

Sector: Energy.

Target price is $2.99.Current Price is $3.01. Difference: ($0.02) - (brackets indicate current price is over target). If VEA meets the Morgan Stanley target it will return approximately -1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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