Nice upgrade today from hold to buy "12:53 PM EDT, 04/04/2019 (MT Newswires) -- .Tudor, Pickering & Holt boosted its rating on the shares of Whitecap Resources (WCP.TO) to Buy from Hold as the oil and gas producer's free cash flow rises.
"We are upgrading WCP CN to a BUY, as our preferred name within the CAD SMID oil group," the investment bank said in a note. "The group as a whole is beginning to look increasingly attractive with an avg FCF yield of 16% at strip and avg debt metrics sub 1.5x, but we see WCP as the most attractive risk/reward option. FCF is certainly en vogue, but it's post maintenance FCF that really matters and this is where WCP screens well. We calculate sustaining capital of C$350MM for WCP, or ~50% of 2019 CF, as compared to 51% for TOG, 62% for CPG and 67% for BTE. Additionally, using 2020 EV/FCF (post maint. capex) to normalize for differing maintenance requirements and debt levels, WCP again stands out at 7.5x EV/FCF in 2020, vs CPG at 8.6x, TOG at 9.4x and BTE at 19.9x. We see Q1 shaping up well, with our Q1 production estimate of 70.7mboepd ahead of the Street by ~2% and with crude holding in above $60, leverage looks much more palatable at 1.7x 2019 and 1.4x 2020."
Whitecap shares were last seen up $0.18 to $4.82 on the Toronto Stock Exchange.
Price: 4.78, Change: +0.14, Percent Change: +3.02
MT Newswires"