RBC Upgrade on Pipestone - from GM RBC’s Luke Davis increased his Pipestone Energy Corp. (
) target to $2.25 from $1.75 with a “sector perform” rating, while Raymond James analyst Chris Cox raised his target to $2 from $1.25 with an “outperform” recommendation The average is $2.10.
“With the Company previously providing an operational update for the quarter alongside its reserve update in February, the focus of the release was on the decision by Management to accelerate capital within the confines of the previous 3-year plan, allowing the Company to hit production levels in-line with the Company’s available infrastructure and processing capacity by 2023,” said Mr. Cox. “While the decision to increase spending stands in contrast to the consensus mantra within the sector today, we note that Pipestone was already a unique growth story in the sector, and one in which the core investment proposition of the story rested on out-sized free cash flow after the Company completes its growth phase. In this respect, the accelerated capital should provide some modest improvement in timing of this inflection point.”