New target price - Desjardins Securities - from G&M “With the Leucrotta acquisition now in the rear-view mirror and the Corrib transaction expected to close in 2H22, VET has capped off a busy stretch of M&A activity which was extremely well-timed as commodity prices continued rising faster than most investors expected,” he said. “Ideally, our preference would be for VET to primarily focus on overseas acquisition opportunities; however, we also recognize that European energy security challenges have likely stretched overseas acquisition multiples. Meanwhile, the Leucrotta transaction could eventually open the door to additional commodity price diversification for VET through future West Coast LNG supply agreements. Otherwise, we expect the company to continue focusing on debt repayment as it remains on track to meet its $1.2-billion net debt target in 4Q22, which should be a catalyst for enhanced shareholder returns through some combination of an increased base dividend, special dividends and share buybacks.”
After raising his production and cash flow projections through 2023, the analyst hiked his target for Vermilion shares to $40 from $32.50. The average is $34.82.
“We expect the company to continue focusing on debt repayment as it remains on track to meet its $1.2-billion net debt target in 4Q22, which should be a catalyst for enhanced shareholder returns through some combination of an increased base dividend, special dividends and share buybacks,” Mr. MacCulloch said.