More Targets Raymond James’ Andrew Bradford cut his Precision Drilling Corp. target to $110 from $135 with a “strong buy” rating, while ATB Capital Marketrs’ Waqar Syed cut his target to $143 from $145 with an “outperform” rating. The average is $127.36.
“Precision provided an operations update that addresses both the impact of wildfires in Canada (considerably less than feared) and the recent sharp decline in the U.S. rig count (more than we had been modeling),” said Mr. Bradford. “The direct net impact of Precision’s update on our 2Q23 EBITDA numbers take us from $129-million EBITDA to $119-million. But the speed and magnitude of the U.S. rig count decline necessitates a reset of our baseline macro forecasts as well. In this respect, we’re also lowering our 2H23 EBITDA outlook by 6 per cent, and lowering our target price ... Notwithstanding our estimate and target reduction, our view is that momentum has driven OFS share prices to levels considerably below what future cash flows would suggest. It’s entirely likely that negative momentum will continue to control the market dynamic over the near-term, but as fundamental analysts, we’re compelled to draw attention to the value opportunity this is creating.”