One investors view of Q3 results ...... Re: Baytex Energy (BTE) Valuation Update - Nov 1
Post by dan_s » Fri Nov 01, 2024 2:53 pm
I have updated my forecast/valuation model for Baytex's solid Q3 results and fresh guidance.
Baytex closed the acquisition of Ranger Oil on June 20, 2023. Ranger Oil was one of my Top Picks in the 2023 Sweet 16. Baytex's Q3 2023 (the first full quarter of combined results) production was 150,601 Boepd. Yesterday Baytex announced Q3 2024 production of 154,468 Boepd, so only modest production growth since the acquisition.
Despite flat production, Baytex is on pace to generate $1.9Cdn Billion of operating cash flow and over $600Cdn million of free cash flow in 2024.
From Q1 2024 total production is up just 2.55%, but their Light Oil & Condensate production, which sold for $100.78Cdn/bbl in Q3 2024 is up 5.77% since the first quarter. I expect their production mix to continue to get more oily.
TipRanks' consensus forecast for 2025 is slightly higher than my forecast:
In Canadian dollars;
Net Income per share of $0.50Cdn and Operating Cash Flow per share of $2.39Cdn. My forecast is $0.35 EPS and $2.28 CFPS.
At the time of this post BTE.TO was trading at $4.06Cdn. < There is nothing that I see which justifies a share price of less than 2X operating CFPS.
My valuation of BTE increases by $0.25 to $5.75US per share ($7.78Cdn per share).
Dan Steffens
Energy Prospectus Group