From the Thursday's upgrades/downgrades about Nat gas /oil As fourth-quarter 2021 earnings season ramps up, equity analysts at National Bank Financial reiterated their view that the Canadian oil and gas sector is poised to deliver another year of strong returns, believing many companies “provide compelling investment opportunities in today’s commodity price environment.”
AND about Nat Gas and oil pricing:
''The firm raised his 2022 and 2023 forecast for WTI to US$81.00 per barrel (from US$70) and US$75.00 (from US$65), respectively. For natural gas, its 2022 NYMEX price assumption rose to US$4.05 per thousand cubic feet from US$3.75. To align with those changes, the analysts made a series of target price adjustments to stocks in their coverage universe. The changes for large-cap stocks are:
- Canadian Natural Resources Ltd. (
, “outperform”) to $90 from $74. The average on the Street is $66.87. - Cenovus Energy Inc. (
, “outperform”) to $28 from $25. Average: $21.43. - Imperial Oil Ltd. (
, “sector perform”) to $70 from $58. Average: $53.74. - Ovintiv Inc. (OVV-N/
, “outperform”) to $60 from $52. Average: US$49.67. - Suncor Energy Inc. (
, “outperform”) to $53 from $45. Average: $42.57.
For mid-cap stocks, their changes are:
- Advantage Energy Ltd. (
, “outperform”) to $11 from $10. Average: $9.36. - ARC Resources Ltd. (
, “outperform”) to $21 from $20. Average: $18.78. - Birchcliff Energy Ltd. (
, “outperform”) to $11 from $10. Average: $9.60. - Baytex Energy Corp. (
, “sector perform”) to $6.50 from $5. Average: $5.02. - Crescent Point Energy Corp. (
, “outperform”) to $15.50 from $13.50. Average: $10.25. - Enerplus Corp. (
, “outperform”) to $20 from $19. Average: $17.58. - Freehold Royalties Ltd. (
, “outperform”) to $18 from $17. Average: $16.17. - Headwater Exploration Inc. (HWX-T, “outperform”) to $10.50 from $9. Average: $8.76.
- Kelt Exploration Ltd. (KEL-T, “outperform”) to $8.50 from $7. Average: $6.85.
- MEG Energy Corp. (MEG-T, “sector perform”) to $25 from $18.50. Average: $16.83.
- NuVista Energy Ltd. (
, “sector perform”) to $11.50 from $9. Average: $10.04. - Peyto Exploration & Development Corp. (
, “outperform”) to $15 from $14. Average: $13.68. - Pipestone Energy Corp. (
, “sector perform”) to $6 from $4.50. Average: $5.17. - Paramount Resources Ltd. (
, “outperform”) to $35 from $30. Average: $29.60. - PrairieSky Royalty Ltd. (
, “sector perform”) to $22 from $18.50. Average: $18.80. - Spartan Delta Corp. (
, “outperform”) to $14.50 from $10. Average: $11.33. - Tourmaline Oil Corp. (
, “outperform”) to $62.50 from $57.50. Average: $63.21. - Topaz Energy Corp. (
, “outperform”) to $25 from $24. Average: $23.35. - Tamarack Valley Energy Ltd. (
, “outperform”) to $7 from $5.50. Average: $6.03. - Vermilion Energy Inc. (
, “outperform”) to $34 from $30. Average: $19.72. - Whitecap Resources Inc. (WCP-T, “outperform”) to $16 from $14. Average: $11.67.
“we reiterate our top ideas which were highlighted in our 2022 outlook (CVE, WCP, CPG, HWX and TVE as our top oil ideas, and TOU, ARX, BIR and SDE as our top gas ideas). For context, this collection of names offers, on average, a FCF yield of 17 per cent on leverage of 0.1 times D/CF [debt to cash flow], while trading at 3.7 times 2022 estimated EV/DACF [enterprise value to debt-adjusted cash flow],” they said,
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National Bank analysts Shane Nagle and Don DeMarco expecting few surprises from the fourth-quarter financial results of base metals producers given their production and 2022 guidance have largely already been released.
Note Jeff is assumong in the 2022 budget
WTI $ US 76
Average HH US$ 4,00
AECO CN$ 3,50
So some room to generate a better FFO than budget in 2022.