GLTALongs. 09:47 AM EDT, 06/08/2022 (MT Newswires) -- Tudor, Pickering & Holt on Wednesday reiterated its buy rating on the shares of Crescent Point Energy (CPG.TO) while raising its price target to C$15.00 from C$12.00 as it sees increasing returns to shareholders following a meeting with the oil and gas producer's management.
"We caught up with President & CEO Craig Bryksa for the latest on a variety of topics including the path forward on shareholder returns, M&A, and the impacts of inflation in the WCSB," analyst Matt Murphy said in a note. "Additionally, we've updated our model for an updated price deck, shifting our 2022 deck to $103/bbl WTI and long-term pricing to $75/bbl following an updated strip. With the company's C$1.3B net debt target in sight, investor focus has been on the path forward for shareholder returns despite what has been an active buyback program YTD (planned C$150MM H1'22) alongside the recently increased dividend to the tune of 40%. Given the free cash flow profile, we see ample room for the company to allocate up to 75% of surplus cash via a growing base dividend, buybacks, and potential further supplementary returns (SIB and/or variable/special dividends) which would equate to a >20% return in 2023 on strip pricing while continuing to de-lever <C$1B. The potential on the acquisition side of M&A discussions has been topical for the stock given marketed packages in company focus areas, such as the Duvernay. That said, we came away from the meeting with a reaffirmed view that the company's disciplined approach to M&A would hold, with the existing Duvernay footprint providing ample inventory runway. For the Canadian E&P group, we continue to see CPG offering an attractive combination of 1) further shareholder returns catalysts post the near-term net debt target achievement; and 2) a discounted free cash flow stream with torque to oil prices in 2023 as the hedge profile trends lower."
(MT Newswires covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://www.mtnewswires.com/contact-us)
Price: 13.30, Change: +0.29, Percent Change: +2.23