RE:RE:Raymond James downgrade $5.50Honestly, I don't have a lot of confidence in RJ analysts. They are always behind the curve and seem to have an axe to grind. It seems like a bunch of guys with giant egos who get angry when they don't get in on the action of a big deal like this....and so much of their revenue usually comes from brokering deals. Deals have been few and far between, so they aren't happy watching their colleagues at the other banks get all the commmission money on a giant deal like this.
So take the price target with a grain of salt.
Also, if I recall, RJ gave BTE a $0.25 target in 2020 in the midst of a powerful recovery that would make many investors a lot of money. I wonder when the quietly pulled that.
They have never been fans of BTE.
ManitobaCanuck wrote: alhiemstra wrote: Raymond James’ Jeremy McCrea lowered his recommendation to “market perform” from “outperform” and cut his target to $5.50 from $8.
“Over the last few years, Baytex had seen one of the largest corporate turnarounds in the sector. Leverage had declined, well economics greatly improved, and the company’s multiple began to rise as shareholder friendly initiatives and ‘value added’ growth was taking place,” Mr. McCrea said. “Unfortunately, in our opinion, the Ranger transaction has changed this momentum. From a higher level, we find three key themes that ultimately lead to corporate challenges: 1) high debt; 2) variable or lower quality assets; and 3) high base ‘cashflow’ declines. On the surface, none of these individual factors would be a cause for concern but when combining these three items together (at their current levels), management will likely need to show exceptional execution. ... We believe that there is much more risk to the name going forward – especially as it starts with a multiple re-rate.”
“Ultimately, we would argue Baytex is not a better company after this transaction. That said, we suspect the company felt their inventory in core plays wasn’t sufficient, and thus needed to do an acquisition (which implies the prior multiple may have been too high). Overall, we expect that investors will be asking if the transaction needed to be as large, and if more work could have been done on organic exploration? We believe this is likely why the share price fell as much as it did [Tuesday] (down 9 per cent vs. XEG: down 1 per cent) and why we believe there’s potentially further downside.”
Fair enough , I am glad he did not put a target of "ZERO" for Baytex like they did for Athabasca Oil in 2020 . Today Athabasca Oil is 3$ vs 14 cents when Raymond James called a target of ZERO .
ROFL