Upgrade to $13.50 11:25 AM EST, 11/09/2022 (MT Newswires) -- Stifel FirstEnergy on Wednesday reiterated its buy rating on the shares of Cardinal Energy (CJ.TO) while raising its price target to C$13.50 from C$13.00 after the Western Canadian oil and gas producer reported third-quarter results.
"Alongside Cardinal's 3Q22 earnings, the company released its plans for 2023, which includes growing production by a modest 3% y/y, while investing less on E&D activities than the did in 2022," analyst Cody Kwong writes. "The highlight for us though, is the establishment of its next return of capital catalyst, which will be encountered when net debt hits zero (expected in 2Q23). At this point, we believe the company could elect to pay out the entirety of its FCF through incremental dividends (base/special) or buybacks which would be highly differentiated in our coverage universe. With our updated 2023 outlook suggesting Cardinal would have an incremental return of capital potential of $87 mm ($0.58/sh), beyond the already compelling 7.4% cash yield, we are increasing our target price to C$13.50/sh and reaffirming our BUY rating."