Bonavista Energy (TSX: BNP), the Materials sector company, has received a rating update from a Wall Street analyst on March 3. Analyst Aaron Bilkoski from TD Securities remains bullish on the stock and has a C$7.50 price target.
“We forecast that volumes will grow 13% by Q4/17 (vs. Q4/16), while spending only 87% of CF (at strip). Worried about AECO into Summer? BNP is Very Well Hedged: Bonavista has a robust hedging portfolio. Not only has the company hedged a material portion of gas volumes (70% in 2017), but also it has been done at an average AECO price of $3.32/mcf. We calculate that a $1.00/mcf change in AECO translates into only an 8% change in 2017E CF and moves 2017E EV/DACF valuation by 0.4x. Think of BNP as a Spirit River Driller (rather than a Glauc driller): In our view, investors continue to perceive Bonavista as a Glauc-focused company. The Glauc play continues to be strong; however, today, the Glauc is no longer the key driver of growth but rather a dependable provider of FCF to direct towards Spirit River development. Bonavista will drill almost twice as many wells in the Spirit River (37.3 net) than the Glauc (19.7 net).”
According to TipRanks.com, Bilkoski is a 1-star analyst with an average return of -3.7% and a 35.5% success rate. Bilkoski covers the Basic Materials sector, focusing on stocks such as BlackPearl Resources Inc, PrairieSky Royalty Ltd, and Pengrowth Energy Corp.
Currently, the analyst consensus on Bonavista Energy is Moderate Buy and the average price target is C$6.29, representing a 90.9% upside.
In a report issued on March 6, GMP FirstEnergy also upgraded the stock to Buy with a C$5.75 price target.
The company has a one year high of C$5.58 and a one year low of C$2.23. Currently, Bonavista Energy has an average volume of 786.7K.
Bonavista Energy Corp. explores, develops and produces oil and natural gas in Canada. Its major properties are concentrated within three core regions in western Canada. The company’s Western core region operations offer multi-zone oil and liquids rich natural gas resources in close proximity to infrastructure and services, with year round access. Its Northern core region is characterized by a production base with a significant inventory of undeveloped acreage. The company’s Eastern region is characterized by low risk development opportunities offering capital flexibility leading to modest production growth. Bonavista Energy was founded in 1997 and is headquartered in Calgary, Canada.