MEG Energy Maintained at Buy at TPH Following Q4 Results; Price Target Kept at C$35.00
09:36 AM EST, 03/01/2024 (MT Newswires) -- Tudor, Pickering, Holt on Friday reiterated its buy rating on the shares of MEG Energy (MEG.TO) and its C$35.00 price target after the oil-sands producer reported fourth-quarter results.
"Slight positive. While Q4'23 results were down the fairway across production, cash flow pre-WC, and capex, a working capital tailwind has net debt on track to reach the company's target a quarter earlier than our model at a similar price deck," analyst Jeoffrey Lambujon wrote. "For the quarter, production tracked in-line at 109.1mbpd (TPHe/Street 108.9mbpd), with C$1.27 CFPS pre-WC also in-line with our forecast (TPHe/Street C$1.27/C$1.26); C$358MM absolute vs. TPHe/Street C$358MM/C$354MM. Net of in-line capex (C$104MM vs. TPHe/Street C$103MM/C$104MM), FCF pre-WC totaled C$254MM, also in-line (TPHe/Street C$255MM/C$250MM), supporting C$219MM in buybacks (NCIB for 10% of public float to be renewed in March). Additionally, aided by a working capital tailwind, net debt ended the year better vs. our model at US$730MM, which sets the company on course to achieve the targeted US$600MM (and the simultaneous step up in shareholder returns to 100%) by Q3'24 at $75/bbl WTI (a quarter ahead of our prior estimate on a similar price deck). Finally, MEG announced a CEO succession plan whereby Derek Evans will step down as President and CEO, to be succeeded by Darlene Gates (current MEG COO, former President of ExxonMobil Alaska)."
(MT Newswires covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://www.mtnewswires.com/contact-us)
Price: 29.02, Change: -0.03, Percent Change: -0.10
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