The Globe and Mail reports in its Thursday, Jan. 26, edition that Canaccord Genuity analyst John Bereznicki, after reducing his WTI price expectation for 2023, lowered his recommendation for PrairieSky Royalty to "hold" from "buy." The Globe's David Leeder writes in the Eye On Equities column that Mr. Bereznicki gave his share target a $1.50 boost to $24. Analysts on average target the shares at $25.23.
Mr. Bereznicki says in a note: "With the change in our commodity price assumptions, our cash flow estimate for PrairieSky Royalty decreases by 5 per cent in 2023. With the stock price increasing by 6.1 per cent since the start of the year, we believe PrairieSky's stock is fairly valued at 12.5 times 2023 estimated EV/DACF [enterprise value to debt-adjusted cash flow]. ... Our $24 target price on PrairieSky reflects a 13.1 times 2023 estimated EV/DACF multiple, compared to the royalty group average of 10.1 times." The Globe reported on Nov. 16 that Raymond James analyst Jeremy McCrea had reaffirmed his "outperform" call on PrairieSky when it was worth $21.74. The Globe reported on Jan. 12 that National Bank rated PrairieSky "sector perform." The shares were then going for $22.13.
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