Scotia Capital Scotia Capital analyst Jason Bouvier thinks “years of underinvestment and continued capital discipline have laid the groundwork for a structurally positive view of Canadian commodity prices.”
However, he updated his estimates and target prices for Canadian E&P companies in his coverage universe in response to changes to the firm’s commodity price forecast. Its 2023 Brent and WTI estimates fell to US$83 per barrel and US$78 per barrel, respectively.
“Near term oil prices will continue to be adversely impacted by the turmoil in the global banking sector as speculators trade on the headline news, creating difficulties to sustain any meaningful oil price rally until the market is convinced that situation is under control,” Scotia said. “All things considered, we continue to believe Brent prices will trade in the range of $70 to $100 over the next 12-18 months with strong downside protection at $70-$75.”
Mr. Bouvier’s target changes include:
- Baytex Energy Corp. ( “sector perform”) to $6.50 from $8. The average on the Street is $7.52.
- Canadian Natural Resources Ltd. ( “sector perform”) to $87 from $86. Average: $91.55.
- Cenovus Energy Inc. ( “sector outperform”) to $28 from $31. Average: $31.83.
- Crescent Point Energy Corp. ( “sector outperform”) to $14 from $13. Average: $14.40.
- Enerplus Corp. ( “sector perform”) to $23 from $25. Average: $23.88.
- Freehold Royalties Ltd. ( “sector perform”) to $17 from $18. Average: $20.11.
- Imperial Oil Ltd. ( “sector outperform”) to $79 from $72. Average: $79.
- MEG Energy Corp. (“sector perform”) to $26 from $22. Average: $25.58.
- Ovintiv Inc. (“sector outperform”) to US$55 from US$62. Average: US$56.58.
- Parex Resources Inc. ( “sector perform”) to $29 from $26. Average: $33.66.
- Suncor Energy Inc. (“sector perform”) to $47 from $50. Average: $53.11.
- Vermilion Energy Inc. (“sector perform”) to $26 from $29. Average: $28.65.