BMO Capital analyst Jeremy Mccrea maintained a Buy rating on Topaz Energy Corp yesterday and set a price target of C$32.00.
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Jeremy Mccrea has given his Buy rating due to a combination of factors, including Topaz’s defensively positioned royalty and infrastructure model that continues to deliver in a volatile macro environment. The company outperformed expectations on both production and cash flow in Q4, achieved record heavy oil volumes, and generated a 92% free cash flow margin supported by lower operating costs and effective hedging.
In addition, infrastructure revenues grew 20% year-over-year with exceptionally high operating margins, while elevated drilling activity and successful Clearwater waterflood projects underpin future growth alongside leading operators. Management also demonstrated strong capital efficiency, creating significantly more PDP value than capital deployed, maintaining a solid PDP NAV per share trajectory and keeping leverage at a comfortable level relative to PDP value.
In another report released today, Canaccord Genuity also maintained a Buy rating on the stock with a C$35.00 price target.