Model Update

Research evidence excerpt

Model Update

'25 JAN '26 JUL '26 JUL '27

Key: Historical Stock Performance Current Stock Price Price Target

Source: Refinitiv, Morgan Stanley Research, Morgan Stanley Institutional Equities Division. The probabilities of our Bull,

Base, and Bear case scenarios playing out were estimated with implied volatility data from the options market as of 23

Jul 2026. All figures are approximate risk-neutral probabilities of the stock reaching beyond the scenario price in either

three-months’ or one-years’ time. View explanation of Options Probabilities methodology here

BULL CASE $45.00 BASE CASE $39.00 BEAR CASE $20.00

~8x Bull Case 2028 EBITDA ~8x 27E EBITDA ~8-times Bear Case EBITDA

A steeper cost curve post-Iran given $85/bbl We expect PE prices to revert gradually Conflict escalates and >$120/bbl oil prices

oil which is not too hot to hurt global revert lower into 2027 (~$70/bbl oil). We push economies into recession and

demand. EU assets shift left at high end of ultimately see ~high 20s to low 30s cpp US ultimately leads to $50/bbl oil prices on

the cost curve, making Asia the high cost PE margins in 2027+ due to both a steeper lower demand and the supply response

producer once it is no longer buying cost curve and a modestly tighter S&D from the conflict. PE margins struggle as

discounted Iranian, Russian and Venezuelan environment than previously expected. This new Chinese capacity continues to ramp

crude oil. This materially improves EU asset equates to an environment more like 2024 regardless of profits and ethane costs move

profitability, but it remains below historical than 2025. We do not see 2025 as the higher with natural gas as US LNG

levels. Ethane prices remain low as US gas benchmark as it was overly influenced by proliferates. Europe remains high cost, but