Risk Reward Update

Research evidence excerpt

Risk Reward Update

'25 FEB '26 AUG '26 AUG '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 31

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 $90.00 BASE CASE $72.00 BEAR CASE $45.00

~8x Bull Case 2028 EBITDA ~8x 2027E EBITDA on SOTP (using peer ~8-times Bear Case EBITDA

multiples)A steeper cost curve post-Iran given $85/bbl Conflict escalates and >$120/bbl oil prices

oil which is not too hot to hurt global We assume PE prices reach a plateau in push economies into recession and

demand. Ethane prices remain low as US gas 3Q26 and then gradually revert lower ultimately leads to $50/bbl oil prices on

stays ~$3/mmbtu. EU assets shift left at the through 2027 (~$70/bbl oil). We ultimately lower demand and the supply response

high end of the cost curve, making Asia the see ~high 20s to low 30s cpp US PE margins from the conflict. PE margins struggle as

high cost producer once it is no longer in 2028+ due to both a steeper cost curve new Chinese capacity continues to ramp

buying discounted Iranian, Russian and and a modestly tighter S&D environment regardless of profits and ethane costs move

Venezulean crude oil. This materially than previously expected. This equates to an higher with natural gas as US LNG

improves EU asset profitability, but it environment more like 2024 than 2025. We proliferates. Europe remains high cost, but