Jefferies raises PTs on Canadian oil and gas producers

ARC Resources

12/04/2024 17:04

** Jefferies raises price targets on several oil and gas
companies, sees TransMountain pipeline project expansion, LNG
exports via Coastal GasLink pipeline, and Canada's resource
longevity boosting the sector
    ** Says almost all oil sands operators discussed additional 
'redundancy' opportunities to shorten turnarounds and improve
throughput creep in 2024/2205
    ** Sees share buybacks taking a step back during Q1 2024 due
to weaker commodity prices and higher capex levels, but sees the
improvement in prices (WTI +9% m/m; WCS diffs: +17% m/m) could
improve free cash flow 
    ** Raises Suncor Energy  SU.TO  ("hold") to C$53 from C$50,
sees a slightly weaker quarter for synthetic crude oil and a
strong quarter for refining on utilization
    ** Raises Cenovus Energy  CVE.TO  ("buy") to C$36 from C$28,
see CVE hitting debt target mid-year, Q1 could see downstream
slightly weaker on wider SCO differentials
    ** Raises Canadian Natural Resources  CNQ.TO  ("hold") PT to
C$110 from C$86, sees marginally lower production volumes in Q1,
with production accelerating in second half of 2024
    ** Other PT raises: 
       Company           Old PT      New PT      Rating
 Ovintiv  OVV.N        $59         $69         Buy
 Arc Resources         C$28        C$30        Buy
  ARX.TO                                       
 MEG Energy  MEG.TO    C$28        C$35        Hold
 Strathcona Resources  C$26        C$36        Hold
  SCR.TO                                       
 Tourmaline  TOU.TO    C$70        C$75        Buy
 
 (Reporting by Seher Dareen in Bengaluru)
 ((Seher.Dareen@thomsonreuters.com;))