Scotia Capital 2022-12-12 07:45 ET - In the News
The Globe and Mail reports in its Saturday, Dec. 10, edition that Scotia Capital analyst Cameron Bean has reiterated his "sector outperform" recommendation for Crew Energy. The Globe's David Leeder writes that Mr. Bean reduced his share target to $10 from $10.50.
Analysts on average target the shares at $8.82. Mr. Bean says in a note: "We expect Crew's 2023 guidance and new four-year plan to receive a negative initial reaction from the market. The company's plan to ramp capital spending (likely above cash flow in 2024 and 2025) and double production by 2026 runs contrary to the E&P sector mantra of capital discipline and maximizing cash distributions to shareholders. While Crew Energy successfully executed on its previous two-year plan, the new plan significantly ups the ante.
The ambitious nature of the plan gives us pause; however, as we previously noted, Crew Energy showed significant operational improvement over the course of its previous growth program. Given these improvements, we are inclined to stick with the stock and believe the plan to continue growing may put Crew Energy ahead of the curve as the sector moves forward. Nevertheless, the company's plan injects new risk into the story."