RE:Eric Nutall - BNN - TOP PICKmore.
PRECISION DRILLING (PD TSX) Despite sluggish oilfield service activity levels currently Precision is rapidly harvesting free cash flow, paying down debt, and returning over 30 per cent of its free cash flow back to shareholders. We are bullish on an increase in natural gas and oil activity in 2025 and have the stock trading at a 23 per cent / 26 per cent 2024/2025 free cash flow yield. Given non-depleting assets we think a 13% free cash flow yield approximates fair value = five times EBITDA = $191 target price = 107 per cent potential upside.