Analysts rate Obsidian Energy Ltd.(OBE:TSX) with a Strong Buy rating and a $15 target

by: Gillian Lawrence
Obsidian Energy Ltd.

Analysts rate Obsidian Energy Ltd. with a consensus Strong Buy rating and a 12-month average target price of $15.47 per share. The Crowd Rating target on the stock is $7.50, with a Sell rating on the company’s stock price.

Based on the Obsidian Energy Ltd stock forecasts from 4 analysts, the average analyst target price for Obsidian Energy Ltd is CAD 15.47 over the next 12 months. Obsidian Energy Ltd’s average analyst rating is Strong Buy. Stock Target Advisor’s own stock analysis of Obsidian Energy Ltd is Neutral, which is based on 5 positive signals and 5 negative signals. At the last closing, Obsidian Energy Ltd’s stock price was CAD 10.93Obsidian Energy Ltd’s stock price has changed by -0.55% over the past week, +22.53% over the past month and +236.31% over the last year.

About Obsidian Energy Ltd (OBE:CA:TSX)

Obsidian Energy Ltd. primarily focuses on the exploration, production, and development of oil and natural gas properties in the Western Canada Sedimentary Basin. The company was formerly known as Penn West Petroleum Ltd. and changed its name to Obsidian Energy Ltd. in June 2017. Obsidian Energy Ltd. is headquartered in Calgary, Canada.

 

Most Recent Analyst Ratings on Obsidian Energy:

News:

The Company recently reported a strong  second quarter financial results, on the back of incresed production and rising commodity prices. The company has raised it’s commodity prices and updated it’s 2022 outlook and provided investors with a preliminary 2023 forecast outlook. The company stated that the capital programme will undergo  a 15 percent inflationary increase over the first half of 2022 levels, in both 2022 and 2023. The company’s preliminary output forecasts for 2023 and 2022 demonstrate that the company’s volumes will increase substantially.

 

OBSIDIAN Energy’s second quarter Results, 2022.

2022 2021
FINANCIAL1
(millions, except per share amounts)
Cash flow from operating activities 83.9 28.4
   Basic per share ($/share)2 1.03 0.39
   Diluted per share ($/share)2 1.00 0.37
Funds flow from operations3 78.6 36.3
   Basic per share ($/share)4 0.97 0.49
   Diluted per share ($/share)4 0.94 0.48
Net income 23.8 23.2
   Basic per share ($/share) 0.29 0.32
   Diluted per share ($/share) 0.28 0.31
Capital expenditures 103.4 29.5
Decommissioning expenditures 8.5 3.3
Long-term debt 368.4 439.9
Net debt3 448.8 455.0
OPERATIONS
Daily Production
   Light oil (bbl/d) 11,114 10,014
   Heavy oil (bbl/d) 5,789 2,788
   NGL (bbl/d) 2,432 2,056
   Natural gas (mmcf/d) 60 50
Total production5 (boe/d) 29,407 23,225
Average sales price6
   Light oil ($/bbl) 117.91 67.34
   Heavy oil ($/bbl) 84.77 40.48
   NGL ($/bbl) 68.09 41.04
   Natural gas ($/mcf) 4.96 3.21
Netback ($/boe)
   Sales price 77.07 44.21
   Risk management gain (loss) (6.58 ) (2.44 )
   Net sales price 70.49 41.77
   Royalties (11.35 ) (2.68 )
   Net operating costs4 (13.93 ) (13.52 )
   Transportation (2.76 ) (1.79 )
   Netback4($/boe) 42.45 23.78

 

What we like:

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.

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 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.

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:

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.

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 return on assets

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

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.

Disclaimer

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