BMO Capital analyst Randy Ollenberger maintained a Buy rating on ARC Resources (AETUF – Research Report) yesterday and set a price target of C$32.00.
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Randy Ollenberger’s rating is based on ARC Resources’ strong commitment to returning free cash flow to its investors, with projections indicating more than $1.6 billion could be distributed by 2025. This commitment is backed by the company’s robust asset performance, including the successful and timely launch of the Attachie Phase 1 project, which is expected to keep generating significant free cash flow.
Additionally, despite expectations of weak natural gas prices, ARC Resources is positioned better than its peers due to its market diversification, higher revenue from condensates, and a solid balance sheet. The shares are currently trading at a discount compared to other North American natural gas producers, which Ollenberger finds unjustified given the company’s strong growth prospects and outstanding financial health.
In another report released on February 7, TD Cowen also maintained a Buy rating on the stock with a C$34.00 price target.