TSX:HSE.PR.B - Post by User
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Nawaralsaadion Nov 15, 2011 10:30am
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Post# 19238129
Scotia take on Q3 numbers
Scotia take on Q3 numbersWarming Up to HuskyEvent¦ Husky reported Q3 adj. CFPS of $1.39, slightly below our estimate of$1.42 and consensus estimate of $1.44.Implications¦ We're slowly warming up to the story, following a year of managementdelivering on guidance and opening the books for investors to getreacquainted with the company. Husky has yet to hit the low end ofguidance since 2004, but currently appears on track to deliver wellwithin the range this year.¦ The vast asset base and Husky's premier heavy oil holdings are enviableand impossible to replicate. Yet the stock trades at the low end of therange relative to its integrated peers (71% P/NAV vs. peers at 86%),and also below the inherently more volatile Senior E&P average (78%).¦ While execution risk at Sunrise remains until the project's first oil in2014, the oil sands leases are not comparable with the company'sTucker assets. In spite of a production gap to be filled in the near term,we think the future may hold a lot of potential for Husky.Recommendation¦ We maintain our 2-Sector Perform rating and $28 one-year target.