Is Sasol a screaming buy?

Interest jumps after Morgan Stanley says there's upside of 180%

Sasol has attracted significant investor interest over the past six weeks as it has plunged to fresh lows. Excluding the Covid pandemic collapse that rattled global markets in 2020, Sasol shares are trading at their lowest levels (under R100) since 2004—two decades ago. It reached a low of R79.70 on 30 December 2024.

At this point, investors will be rightfully asking themselves whether the stock is a screaming buy or not. Surely, it cannot go much lower? But they might've been asking themselves the same questions a month ago. If you bought at the R80 level, you're already down 10%.

Interest in the share intensified this week, seemingly after Morgan Stanley upgraded its price target for Sasol on 7 January to R225—upside of 178% from current levels.

In overnight trading on the New York Stock Exchange on Tuesday, nearly 2.3 million shares were traded.

This is approximately double average levels over the last three months (on some days, triple) and the highest daily volume since 2021 according to exchange data.

On current metrics, the share looks tremendously undervalued. Its enterprise value is $7.54 billion (about R142 billion)—this was $10 billion as at 30 June 2024, the end of its financial year—while its market cap is $2.77 billion, meaning a price-to-book ratio of 0.37.

According to some forecasts, its forward price-earnings ratio is in single digits.