Canaccord downgrades Canadian oil and gas firms Encana Corp, Husky Energy

Questor Technology

14/01/2020 11:51

** Brokerage Canaccord Genuity says its focus would be on
free cash flow for Canadian large cap and integrated space in
2020
    ** Says investors should focus on Suncor Energy  SU.TO  and
Canadian Natural Resources  CNQ.TO  given the volatility in
prices
    ** Downgrades Canadian oil and gas producers Husky Energy
 HSE.TO  to "sell" from "hold" and Encana  ECA.TO  to "hold"
from "buy"; expects both to have lower free cash flow yield this
year vs the sector average 
    ** However, brokerage says it has not built in a significant
premium for the recent geopolitical tension in the Middle East
    ** Says a "re-escalation' could result in further near-term
spikes in the oil price
     ** Canadian E&P companies will underspend cash flow through
at least H1/20 as they look to strengthen their balance sheets -
Canaccord Genuity 
    ** Brokerage favours oilfield companies with exposure to
production like CES Energy Solutions  CEU.TO , Tervita Corp 
 TEV.TO  and Secure Energy Service  SES.TO  
    ** Some of the PT changes are as follows:
    
 Companies              PT Changes 
 Precision Drilling     Raises PT to C$3 from C$2.50
 Corp                   
 Imperial Oil  IMO.TO   Raises PT to C$40 from C$39
 Cenovus Energy Inc     Raises PT to C$14 from C$13
 Canadian Natural       Raises PT to C$46 from C$45
 Resources Ltd          
 Tourmaline Oil Corp    Raises PT to C$18 from C$17
 


 (Reporting by Arundhati Sarkar in Bengaluru)
 ((Arundhati.Sarkar@thomsonreuters.com; +1 646 223 8780 Ext:
1524; Reuters Messaging:
arundhati.sarkar.thomsonreuters.com@reuters.net))