Baytex Energy Kept at Hold at Stifel FirstEnergy as it Agrees to Buy Ranger Oil for US$2.5 Billion; Price Target Cut to C$7.00
09:49 AM EST, 03/01/2023 (MT Newswires) -- Stifel FirstEnergy on Wednesday reiterated its hold rating on the shares of Baytex Energy (BTE.TO) while lowering its price target to C$7.00 from C$8.00 after the oil and gas producer agreed to acquire Ranger Oil (ROCC) for US$2.5 billion in cash, shares and debt to expand in the Eagle Ford shales in Texas.
"Baytex announced they will be acquiring Ranger Oil Corp. (ROCC) in a cash and share bid advertised at $3.4 billion," analyst Cody Kwong wrote. "This purchase fashions the Company with operated position in the Eagle Ford that meaningfully increases the scale and scope of this core focus region for the company ahead. Not only does this acquisition effectively double BTE's enterprise value and production, it also comes with a commitment to increase its returns to shareholders via increased buybacks and the introduction of a modest dividend. We maintain our HOLD ranking with a reduced target price of $7.00/sh as our estimates show the transaction to be modestly dilutive (on a per share, debt adjusted basis), while taking on elevated financial risk for assets that have a return profile similar to its pre-existing inventory.
(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: 5.44, Change: +0.18, Percent Change: +3.42