Globe says "plenty of upside" seen at Vermillion Energy 2021-03-10 07:49 ET - In the News
The Globe and Mail reports in its Wednesday edition that Raymond James analyst Jeremy McCrea is keeping his "outperform" call on Vermilion Energy. The Globe's David Leeder writes that Mr. McCrea boosted his share target by $3 to $11. Analysts on average target the shares at $8.20. Mr. McCrea says the company's fundamentals are "quickly improving." Vermillion's fourth quarter results, posted Monday, matched production expectations and exceeded cash flow estimates. Mr. McCrea says in a note: "Our thesis on VET has historically been one of profitability. Much of this is due to their international diversification where 'conventional' style geology generally has better rates of return than shale/tight oil plays. This high return on capital allowed the company to have a much higher dividend payout, even while holding production and leverage levels steady over the last five years. The rapid decline in commodity prices in 2020 however quickly had Vermilion playing defence given the drop in cash flow. ... With torque to the share price given the company's leverage, profitable projects but shareholder sentiment on the name still low, we believe VET could have plenty more upside to the name if commodity prices hold."
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