09:46 AM EST, 01/04/2022 (MT Newswires) -- Goldman Sachs on Tuesday reiterated its buy rating on upstream and downstream Canadian oil companies as it forecasts a strong 2022 for its buy-rated companies in the sector, including Canadian Natural Resources (CNQ.TO), Suncor Energy (SU.TO), Cenovus Energy (CVE.TO) and Parkland Corp (PKI.TO).
"We maintain our bullish Canada Oil outlook in 2022, given (1) the subsector's compelling FCF yield (Buy-rated average 16%), (2) competitive 2022 capital returns (Buy-rated average yield 8%), (3) improving egress outlook with Line 3 now online and TMX expected online (GS expects 2Q23), and (4) unique and attractive asset quality of the subsector with long reserve life and low decline rates," the investment bank said in a report. "We view the best way to express this bullish Canada outlook through Buy-rated Canadian Natural Resources (FCF power, shareholder returns, improving WCS pricing) with 23% 12-month total return, Suncor (valuation, capital returns, strong Downstream) with 22% total return, and Cenovus Energy (deleveraging, capital returns, HSE synergies) with 20% total return. Within our Downstream coverage, we express the bullish Canada view through Buy-rated Parkland Corporation (SOTP value, advantaged refining, strong execution) with 21% total return on a 6-month time frame."