CIBC CAPITAL MARKETS EARNINGS BEAT!ARC’s Q4 results topped expectations across the board, and the company’s reserve book update was also characteristically strong. There was no change to guidance in 2023, although we continue to expect ARC will look to sanction Attachie this year, and therefore continue to carry project spending in our 2023 and 2024 estimates. The stock has lagged peers to start 2023; however, we view the weakness as overdone and see these results reinforcing our positive view on the shares. Inclusive of our estimate of modest Attachie spending in 2023, ARC is trading at an 8% free cash flow yield on strip (peers at 8%) and 3.8x EV/DACF (peers 4.0x). We maintain our Outperformer rating and $25 price target.
Looking forward to this stock trading closer to its actual value soon!
GLTA ARX BULLS