ATB Raise TargetsOnly included the stocks that I own. GLTA In a research report released Wednesday previewing third-quarter earnings season for Canadian energy exploration and production companies, ATB Capital Markets analyst Patrick O’Rourke made a series of target prices increases for stocks in his coverage universe in response to higher price projections for Brent crude oil through 2025.
“While commodity strip has remained strong in a historical context and accordingly corporate Upstream FCF forecasts remain favourable into 2023, recessionary discussions have added to crude volatility (the Q3/22 Crude Volatility Index was up 35 per cent relative to the same quarter in 2021) have added a layer of complexity to return of capital discussions,” he said. “Capital return strategies have remained prominent with investors, where we will be watching for execution whether it by way of special dividends or share buybacks. Investors will favour companies that appear to be sticking most closely to its messaging and meeting capital distribution targets (with ERF and TOU as prominent examples). The shift to return of capital via codified messaging has generally acted as a tailwind for equity performance, and we view SDE and ATH as the most likely candidates jump on to the return of capital bandwagon between now and the end of 2022.”
For oil sands companies, his changes were:
- Cenovus Energy Inc. ( “outperform”) to $35 from $34.50. Average: $33.21.
His large-cap changes were:
- ARC Resources Ltd. (“outperform”) to $24.50 from $23. Average: $24.72.
- Crescent Point Energy Corp. ( “outperform”) to $15 from $14. Average: $15.12.
- Enerplus Corp. ( “outperform”) to $24 from $23. Average: $23.50.
- Tourmaline Oil Corp. ( “outperform”) to $100 from $90. Average: $96.25.
- Whitecap Resources Inc. (“outperform”) to $16 from $15.50. Average: $15.13.
His mid-cap changes were:
- Birchcliff Energy Ltd. ( “outperform”) to $14 from $13. Average: $14.44.
- Spartan Delta Corp. ( “outperform”) to $16.50 from $15. Average: $19.79.