Bullboard - Stock Discussion Forum North American Construction Group Ltd T.NOA

Alternate Symbol(s): NOA | T.NOA.DB.A | T.NOA.DB.B

North American Construction Group Ltd. is a Canada-based company. The Company provides a range of mining and heavy civil construction services to customer in the resource development and industrial construction sectors within Canada, the United States, and Australia. Its segments are Heavy Equipment - Canada, Heavy Equipment - Australia, and Other. Heavy Equipment - Canada and Heavy Equipment -... see more

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TSX:NOA - Post Discussion

North American Construction Group Ltd > ATB Raise Target

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Post by retiredcf on Dec 22, 2023 4:08pm

ATB Raise Target

ATB Capital Markets analyst Waqar Syed and Tim Monachello see 2024 in the North American Energy Services sector as a “stock picker’s market,” expecting outperformance from companies that possess “minimal cyclical U.S.-exposure, high cash-return to shareholders profiles, and ‘Alpha’ opportunities.”

In a research report released Friday, the analysts said the focus for the first half of the year will centre on slowing production growth south of the border “even as long-cycle investments continue.”

“We enter 2024 with WTI at about US$70 per barrel and HHUB gas price at US$2.50 per thousand cubic feet,” they said. “Rising U.S. oil production (1.0 million barrels per day year-over-year year-to-date) offset the impact of OPEC+ voluntary cuts for Q1/24, negatively impacting the oil macro. U.S. production rose in 2023, despite a nearly 20-per-cent cut in U.S. active rigs and pumping crews.

“As a result, we believe downside risk exists to the consensus view of rising U.S .D&C activity in H1/24, and any sequential improvements will likely be modest at best. We further reduce our U.S. rig activity forecast, and now project only a 30-rig increase between Q4/23 and Q4/24. Given the downside risk to the US outlook, we see downside risk to US cyclically levered companies including HAL-N, HP-N, NINE-N and NBR-N; as such, we downgrade HAL-N and NBR-N to Sector Perform, and lower the PT for several US cyclically exposed companies, PUMP-N being the exception.”

“On the theme of debt reduction in 2024, we highlight AKT.A-T, EFX-T, ESI-T, and PD-T as they should be able to pay down substantial debt in 2024, transferring value from debt-holders to equity-holders.”

For Canadian companies, they made these other target adjustments:

Akita Drilling Ltd. ( “outperform”) to $3.25 from $3.50. Average: $3.50.
Cathedral Energy Services Ltd. (“outperform”) to $1.30 from $1.40. Average: $1.78.
Ensign Energy Services Inc. ( “outperform”) to $5 from $7. Average: $4.54.
North American Construction Group Ltd. ( “outperform”) to $44 from $40. Average: $43.83.
PHX Energy Services Corp. (“outperform”) to $11 from $11.50. Average: $9.90.
Precision Drilling Corp. ( “outperform”) to $140 from $145. Average: $131.71.