Analysts rate Obsidian Energy Ltd.(OBE:CA:TSX) with a Buy, $10 Target

STA Research
by: STA Research

Analysts rate Obsidian Energy Ltd. with a Buy rating and a 12-month average target price of $10.03 per share.

Raymond James Capital maintained Obsidian Energy Ltd. with an Outperform rating and raised the target price from $13 to $15.50 on the company’s stock.

Based on the Obsidian Energy Ltd stock forecasts from 3 analysts, the average analyst target price for Obsidian Energy Ltd is CAD 10.03 over the next 12 months. Obsidian Energy Ltd’s average analyst rating is Buy . Stock Target Advisor’s own stock analysis of Obsidian Energy Ltd is Slightly Bullish , which is based on 7 positive signals and 4 negative signals. At the last closing, Obsidian Energy Ltd’s stock price was CAD 10.98. Obsidian Energy Ltd’s stock price has changed by +1.59% over the past week, +0.14% over the past month and +433.01% over the last year.

What we like:

Underpriced compared to earnings

The stock is trading low compared to its peers on a price to earning basis and is in the top quartile. It may be underpriced but do check its financial performance to make sure there is no specific reason.

Underpriced compared to book value

The stock is trading low compared to its peers on a price to book value basis and is in the top quartile. It may be underpriced but do check its financial performance to make sure there is no specific reason.

Superior return on equity

The company management has delivered better return on equity in the most recent 4 quarters than its peers, placing it in the top quartile.

Superior capital utilization

The company management has delivered better return on invested capital in the most recent 4 quarters than its peers, placing it in the top quartile.

Superior return on assets

The company management has delivered better return on assets in the most recent 4 quarters than its peers, placing it 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:

Low market capitalization

This is among the smaller entities in its sectors with below median market capitalization. That may make it less stable in the long run unless it has a unique technology or market which can help it grow or get acquired in future.

High volatility

The total returns for this company are volatile and above median for its sector over the past 5 years. Make sure you have the risk tolerance for investing in such stock.

Low Earnings Growth

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

Low Revenue Growth

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

 

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