Ensign Energy Services, the Energy sector company, was revisited by a Wall Street analyst today. Analyst John Gibson CFA from BMO Capital downgraded the rating on the stock to a Hold and gave it a C$3.00 price target.
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John Gibson CFA has given his Hold rating due to a combination of factors affecting Ensign Energy Services. The company has made significant progress in reducing its debt, with over $500 million paid down since 2021. However, it is anticipated that the company will not meet its $600 million debt reduction target until mid-2026, and its leverage remains slightly high compared to industry standards. This financial positioning suggests that substantial shareholder returns may not materialize until 2027.
Additionally, John Gibson CFA notes that the overall activity levels in North America are expected to remain subdued, with lower commodity prices providing little motivation for increased drilling activity. Although there might be some positive developments in natural gas drilling, Ensign Energy Services is likely to perform in line with broader rig counts over the next year. Given these circumstances and the stock’s recent 30% increase since August, the Hold rating reflects a cautious outlook, with better near-term opportunities available in the Canadian oilfield service sector.
Gibson CFA covers the Energy sector, focusing on stocks such as North American Construction Group, Ensign Energy Services, and Parkland. According to TipRanks, Gibson CFA has an average return of 23.0% and a 63.58% success rate on recommended stocks.
In another report released on December 11, TR | OpenAI – 4o also reiterated a Hold rating on the stock with a C$3.00 price target.