RE:RE:RE:RE:Scotiabank Raises Tourmaline Price Target to $57 +OutperformActually the latest report has a price target of 59 CAD
Latest Research (July 29, 2021): OUR TAKE: Positive. TOU delivered strong Q2/21 results with production and Adjusted Funds Flow (AFF) coming in ahead of guidance and Street expectations. The company's 2H/21 drilling program is ahead of schedule and Q3/21 production guidance is just above Street expectations. In our view, the company's recent North Montney acquisitions and long-term JKM linked natural gas marketing arrangement (see our notes here, here, and here) have bolstered an already-strong story and solidified TOU in the top-tier of North American natural gas producers. TOU continues to be our top pick, with (1) a top-tier asset base (~2.0x weighted-average well-level PIR), (2) a bestin-class natural gas marketing portfolio (~20% US Pacific Coast and ~6% JKM exposure in 2023), (3) a strong free cash flow yield (>20% 2022 FCFf yield vs. North American large cap peers at ~15%), and (4) attractive valuation (~2.9x 2022E DACF versus peers at ~4.1x; ~$US$1.77/mmBtu Henry Hub price discounted in the current share price [see Exhibit 2]). We maintain our SO rating and $59 per share target price.