Athabasca Oil Corporation (ATH:TSX) RBC sees little upside left, target $3.25

STA Research assigns Athabasca Oil Corporation a Hold rating at CAD 2 target
RBC Royalbank maintains the sector perform rating at CAD 3.25 target

Based on the Athabasca Oil Corporation stock forecasts from 3 analysts, the average analyst target price for Athabasca Oil Corporation is CAD 2.80 over the next 12 months. Athabasca Oil Corporation’s average analyst rating is Hold . Stock Target Advisor’s own stock analysis of Athabasca Oil Corporation is Slightly Bearish, which is based on 4 positive signals and 6 negative signals. At the last closing, Athabasca Oil Corporation’s stock price was CAD 2.87. Athabasca Oil Corporation’s stock price has changed by -0.16% over the past week, +0.50% over the past month and +189.90% over the last year.

Recently, RBC Royalbank maintained the Sector Perform rating on the stock, with a 12 month target forecast of $3.25 per share.

STA Research assigned a Hold rating on the stock with a target price of $2.00.

 

Athabasca Oil Corporation engages in the exploration, development, and production of light and thermal oil resource plays in the Western Canadian Sedimentary Basin in Alberta, Canada. The company operates through Thermal Oil and Light Oil segments. Its principal properties are in the Greater Placid and Greater Kaybob areas near the Town of Fox Creek in northwestern Alberta; and the Leismer and Hangingstone projects located in the Athabasca region of northeastern Alberta. The company produces light and medium crude oil, tight oil, conventional natural gas, shale gas, and natural gas liquids; and bitumen from sand and carbonate rock formations. As of December 31, 2021, it held approximately 889,000 net acres of mineral resource leases, licenses, and permits, which include approximately 347,000 net acres of oil sands leases and permits, and approximately 337,000 net acres of petroleum and natural gas leases in the Athabasca region of northwestern Alberta; approximately 204,000 net acres of petroleum and natural gas leases in northwestern Alberta; and had an interest in approximately 254 gross wells of bitumen, crude oil, and natural gas. The company was formerly known as Athabasca Oil Sands Corp. and changed its name to Athabasca Oil Corporation in May 2012. Athabasca Oil Corporation was incorporated in 2006 and is headquartered in Calgary, Canada.

What we like:

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.

Superior Revenue Growth

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

High Gross Profit to Asset Ratio

This stock is in the top quartile compared to its peers on Gross Profit to Asset Ratio. This is a popular measure among value investors for showing superior returns in the long run.

 

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.

Overpriced compared to book value

The stock is trading high compared to its peers median on a price to book value basis.

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 assets

The company management has delivered below median return on assets 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