Globe and Mail
CIBC Worlds Markets analyst Dave Popowich says Baytex Energy Corp. (BTE-T) is ready to roll after closing its acquisition of Raging River Exploration Corp. and has upgraded the stock to outperformer from sector performer. His 12-to-18-month target price is $7, versus Wednesdays close of $3.93. CIBC and other banks working on the Baytex deal were free to resume analyst coverage of the company Thursday, and the CIBC note, combined with an upgrade from ScotiaBank, likely contributed to Baytex gaining nearly 8 per cent in Thursdays trading. Story continues below advertisement In our view, the merger with Raging River is an emphatic statement of Baytex's re-entry to the ranks of the intermediate Canadian oil producers, Mr. Popowich wrote. Whereas the stock has recently occupied a niche on the fringes of investor mindshare due to its high financial leverage and modest growth capability, we believe the new entity stacks up favourably vs. the other mid-cap oil-weighted producers in our coverage universe, particularly considering its discounted valuation. Mr. Popowich uses a valuation method based on a multiple of debt-adjusted cash flow and says his price target, which offers 65 per cent upside, is still a discount to Baytex peer group.