Scotiabank raised the target on Advantage Energy Ltd.(AAV:CA:TSX) to $13.

STA Research
by: STA Research

Scotiabank raised the target on Advantage Energy Ltd. to $13 from $12.50, and maintained the Outperform rating on the energy stock.

CIBC maintains Advantage Energy Ltd. with a Neutral rating and keeps the target price at $10. 

Based on the Advantage Energy Ltd stock forecasts from 8 analysts, the average analyst target price for Advantage Energy Ltd is CAD 8.72 over the next 12 months. Advantage Energy Ltd’s average analyst rating is . Stock Target Advisor’s own stock analysis of Advantage Energy Ltd is Slightly Bullish , which is based on 5 positive signals and 4 negative signals. At the last closing, Advantage Energy Ltd’s stock price was CAD 8.45. Advantage Energy Ltd’s stock price has changed by +0.52% over the past week, +1.04% over the past month and +256.54% over the last year.

What we like:

Low debt

The company is less leveraged than its peers ,, and is among the top quartile, which makes it more flexible. However, do check the news and look at its sector. Sometimes this is low because the company is not growing and has no growth potential.

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.

Underpriced on free cash flow basis

The stock is trading low compared to its peers on a price to free cash flow 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 Earnings Growth

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

What we don’t like:

Poor risk adjusted returns

This company is delivering below median risk adjusted returns in its peers. Even if it is outperforming on returns , the returns are unpredictable. Proceed with caution.

Below median dividend returns

The company’s average income yield over the past 5 years has been low compared to its peers. However, it is not a problem if you are not looking for income.

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 capital utilization

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

 

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