Sasol (SOL SJ) Buy: Crisis reaffirms strategic, terminal value

Research evidence excerpt

Sasol (SOL SJ) Buy: Crisis reaffirms strategic, terminal value

Equities ● Chemicals

14 May 2026

Crisis reaffirms value

◆ Hormuz disruption cements Secunda’s post-2030 runway and Sasol’s

terminal value case

◆ Spot conditions imply cZAR7-9bn monthly EBITDA; leverage drops

c5-7% every month during disruption

◆ Reiterate Buy, raise TP to ZAR260 from ZAR220 on higher oil

assumptions and updated estimates

Terminal value back on table

Strategic, terminal value reaffirmed: The current Strait of Hormuz crisis has not only elevated

Sasol’s earnings power and accelerated its deleveraging, but has also reaffirmed the strategic

value of the assets and a re-tabling of its terminal value, in our opinion.

A domestic source of fuel is vital, in a post Hormuz environment to SA’s national interests and

underlines Sasol’s value to South Africa and provides a runway for the Secunda operations well

into the 2030s, in our view, transforming the valuation context, by putting terminal value back in

play. We have written extensively in the past about how Sasol needs to establish investor

confidence in a post 2030 horizon to drive a re-rating, see ‘What we need to hear at the CMD,

30 Apr 2025 and Dear Simon, 19 Mar 2024. Hormuz, has cemented the post 2030 pathway

more firmly than management actions alone could have.

Investment case derisked: It’s not often that a stock that’s up >100% YTD is less risky now

than at the start of the year, but we believe that is the case with Sasol. Higher for longer oil

prices remove downside risks around potentially dilutive capital raises while elevated earnings

power and rising cash generation drive accelerated deleveraging, putting the business on a

more sustainable debt footing. Even the chemicals business is having a moment in the sun,