Also Canaccord Canaccord Genuity’s Mike Mueller raised his Whitecap Resources Inc. target to $14.50 from $14 with a “buy” rating, while RBC’s Luke Davis bumped his target to $14 from $13 with an “outperform” rating. The average is $13.23.
“Wednesday after market, WCP reported a healthy beat on Q1/24 results and announced an increase to this year’s production guidance with no change to spending levels,” said Mr. Mueller. “Production last quarter of 169,660 boe/d came in 4 per cent above both our forecast and the Street driven by strong performance in the Montney and Glauconite. WCP also printed CFPS of $0.64, beating both our forecasts and the Street at $0.60. Due to this outperformance, as well as its Musreau battery starting up two weeks ahead of schedule and 10 per cent under budget, WCP is increasing its 2024 guidance by 2.0 mboe/d to 167.0-172.0 mboe/d with no change to spending of $0.9-1.1-billion .... The company is growing its business 5 per cent a year into what we believe will be a more compelling regional pricing environment while having over two decades of inventory to sustain this growth rate. While we don’t foresee crude dropping to a US$50/bbl level this year, the current $0.73/share dividend is sustainable down to these levels. As we’ve highlighted previously, with approximately one-third of its production being under secondary/tertiary recovery, WCP’s maintenance capital is $750-million, driving this dividend sustainability. We reiterate our BUY rating on WCP, which we continue to view as our top oil-weighted name.”