Sasol Share Price Aims for R300 as Oil Rally Boosts Sector Sentiment Despite Downgrade

Quick overview

Shares of Sasol Ltd. have surged as rising oil prices improve the company’s outlook, though underlying risks remain.

Oil Price Surge Drives Share Rally

Sasol has seen strong upward momentum in recent weeks, with its shares jumping sharply as global oil prices climbed.

The rally has been driven by escalating tensions in the Middle East, particularly involving the United States, Israel, and Iran. At one stage, West Texas Intermediate crude surged close to $120 per barrel before easing back below $100.

Concerns around potential disruptions in the Strait of Hormuz, a key global shipping route, have played a central role in pushing oil prices higher and lifting energy-linked equities such as Sasol.

Mixed Analyst Views

Despite the strong rally, analyst sentiment remains divided.

UBS recently downgraded Sasol from Buy to Neutral, citing the sharp rise in the share price and already elevated oil prices. The downgrade suggests that much of the positive outlook may already be reflected in current valuations.

In contrast, JPMorgan Chase upgraded the stock to Overweight, significantly raising its price target. The bank pointed to ongoing supply risks in global oil markets, which could keep prices elevated and continue supporting Sasol’s earnings outlook.

Technical Levels Come Back Into Focus

From a technical standpoint, Sasol’s chart suggests a trend reversal in 2026 after being bearish since 2022. In August, the stock successfully reclaimed its 50-week simple moving average (yellow), reigniting buying interest and confirming a medium-term trend shift. That level, currently around R100, has since acted as a key support zone and it held strong despite the temporary piercing below it.

SOLJ Chart Weekly – Buyers Have Broken Above the 200 SMA

The 100-week moving average (green) which rejected the bounces higher twice was broken in February and last week the 200 weekly SMA (purple) was broken too as buyers pushed the price above R200 level.

SOLJ Chart Monthly – The 200 SMA Held As Support

On the monthly chart above the 20 SMA (gray) was acting as a resistance indicator, which rejected the price but we saw a clear break last month and turned into support. In March, buyers are testing the 50 monthly SMA (yellow) and it seems like they’re breaking above it, but the month is still young.

Earnings Highlight Volatility

Sasol’s recent financial results underline its sensitivity to oil price fluctuations.

For the six months ending December 2025, net income fell sharply to R241 million, down from R4.6 billion a year earlier. The decline was driven by lower oil prices during that period, which compressed margins across its fuels and chemicals businesses.

Additional pressure came from a R3 billion impairment at its Secunda operations, further weighing on profitability. Despite this, the company maintained positive free cash flow and reduced capital expenditure to support its balance sheet.

Operational Improvements Support Stability

Operationally, Sasol has made progress in stabilizing production.

Improved coal quality at its Secunda facility has supported higher output, while the company continues to play a key role in supplying fuel to major infrastructure such as OR Tambo International Airport.

The recovery of its Natref refinery has also allowed Sasol to raise its fuel sales guidance for 2026, providing further support to its operational outlook.

Sasol 2025 Earnings Report

📊 Financial Performance

Adjusted EBITDA:

• Declined 12% YoY to R21 billion
• Impacted by weaker commodity prices and a stronger rand

Cost Discipline:

• Cash fixed costs down 2% to R34 billion
• Capital expenditure reduced 43% to R8.5 billion

Free Cash Flow:

• Positive R0.8 billion
• First positive FCF in four years
• Improvement of more than 100% versus the prior period

Impairments:

• Total impairments of R7.8 billion
• R3.0bn (Secunda)
• R3.9bn (Mozambique PSA)
• R0.5bn (CTT)
• EBIT declined 52%

Net Debt:

• Stood at US$3.8 billion
• Slightly above long-term target of below US$3 billion
• Year-end target set below US$3.7 billion

⚙️ Operations & Safety

• Management highlighted safety focus following a fatal incident
• Secunda production increased 10%
• De-stoning plant now operating at full capacity
• Gas startup delays and revised PSA volumes slowed monetization
• Throughput remained constrained despite operational improvements

🌱 Grow and Transform Strategy

• Over 1.2 GW of renewables contracted toward 2 GW by 2030 target
• Secured approximately 9 million tonnes of carbon offsets
• Zaffra JV awarded EUR 350 million grant
• Targeting ~2,000 barrels per day eSAF production
• First production expected around 2030

Strategy and Outlook

Sasol has strengthened its financial resilience through hedging, securing an oil price floor and protecting a portion of future production. The company is also gradually advancing its transition toward renewable energy, with significant capacity already secured.

While higher oil prices provide a near-term boost, Sasol’s outlook remains closely tied to commodity cycles. Sustained gains will likely depend on continued price support and disciplined execution across its operations.

ABOUT THE AUTHOR See More

Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.

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