Valuations Back to Reflecting Fundamental Realities, Following Early-April Spike: In early April, several stocks in the coverage universe moved meaningfully higher, to reflect rising geopolitical risks, higher crude prices and other company-specific factors. However, in
the context of the discussion above, our coverage universe has subsequently checked back. In our view, it is too early to look beyond 2024, despite what appears to be a more constructive year for North American industry activity in 2025 with TMX, LNG Canada, Golden Pass, and other U.S. LNG facilities coming online in the near- and medium-term.
Q1/24 Preview & Estimate Changes: Canadian D&C activity got off to a slow start due to extremely cold weather conditions, although this was known during the Q4/23 reporting period and reflected in estimates at that time. Alongside the changes to our Canadian and U.S. industry activity assumptions, D&C-weighted companies feature modest declines
in estimates with others largely unchanged. In a concurrently published note, we are upgrading North American Construction Group to BUY (Hold previously) with an unchanged $34.00 target price.