Analysts rate MEG Energy Corp(MEG:TSX) with a Buy rating and a target price of $22.98

STA Research
by: STA Research
MEG Energy Corp

Analysts rate MEG Energy Corp with a consensus Buy rating and a 12-month average target price of $22.98 per share.

Based on the MEG Energy stock forecast from 11 analysts, the average analyst target price for MEG Energy Corp is CAD 22.98 over the next 12 months. MEG Energy Corp’s average analyst rating is Buy . Stock Target Advisor’s own stock analysis of MEG Energy Corp is Slightly Bearish, which is based on 4 positive signals and 6 negative signals. At the last closing, MEG Energy Corp’s stock price was CAD 16.81MEG Energy Corp’s stock price has changed by -6.77% over the past week, -0.83% over the past month and +101.32% over the last year.

About MEG Energy Corp (MEG:CA:TSX)

MEG Energy Corp., an energy company, focuses on sustainable in situ thermal oil production in the southern Athabasca oil region of Alberta, Canada. The company owns a 100% interest in approximately 410 square miles of mineral leases. It also develops oil recovery projects that utilize steam-assisted gravity drainage extraction methods to improve the recovery of oil, as well as lower carbon emissions. The company transports and sells thermal oil to refiners in North America and internationally. As of December 31, 2021, it had approximately 2.0 billion barrels of gross proved plus probable bitumen reserves at the Christina Lake Project. The company was incorporated in 1999 and is headquartered in Calgary, Canada

What we like:

High market capitalization

This is one of the largest entities in its sector and is among the top quartile. Such companies tend to be more stable.

Superior risk adjusted returns

This stock has performed well, on a risk adjusted basis, compared to its sector peers(for a hold period of at least 12 months) and is in the top quartile.

Positive cash flow

The company had positive total cash flow in the most recent four quarters.

Positive free cash flow

The company had positive total free cash flow in the most recent four quarters.

What we don’t like:

Overpriced compared to earnings

The stock is trading high compared to its peers on a price to earning basis and is above the sector median.

Overpriced on cashflow basis

The stock is trading high compared to its peers on a price to cash flow basis. It is priced above the median for its sectors. Proceed with caution if you are considering to buy.

Poor return on equity

The company management has delivered below median return on equity in the most recent 4 quarters compared to its peers.

Poor capital utilization

The company management has delivered below median return on invested capital in the most recent 4 quarters compared to its peers.

Highly leveraged

The company is in the bottom half compared to its sector peers on debt to equity and is highly leveraged. However, do check the news and look at its sector and management statements. Sometimes this is high because the company is trying to grow aggressively.

Low Earnings Growth

This stock has shown below median earnings growth in the previous 5 years compared to its sector.

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