Post by
bosstrade on Mar 08, 2021 7:45am
Nutall predictions yrs ago
He thinks WCS will stabilize at $17 discount to WTI for the next few years. If you see Line 3 being completed this year and rail filling the gap, this company offers a tremendous leverage to tightening WCS. Their debt levels have been cut sharply. At $55 WTI, this company generates massive cash flow. At $80 WTI and $20 WCS discount, his target is $4.13 for the stock price. At $70 it is $2.67 per share. You can see the leverage.
Comment by
Chris007 on Mar 08, 2021 10:56am
Obviously he was using a higher multiple than the 4 times EV/CF in his current valuation model. That being said, the entire sector has seen significant multiple contraction since late 2018/early 2019. Whether energy comes back in vogue or not remains to be seen. However, even using 4 times EV/CF, the stock is still pretty cheap.