Freehold Royalties, the Energy sector company, was revisited by a Wall Street analyst yesterday. Analyst Jeremy Mccrea from BMO Capital maintained a Hold rating on the stock and has a C$15.00 price target.
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Jeremy Mccrea has given his Hold rating due to a combination of factors including Freehold Royalties’ strong cash flow performance and strategic U.S. expansion efforts. The company has shown a high-margin and low-debt profile, which provides a risk-averse investment opportunity in the North American Oil & Gas sector. Despite a cash flow beat and improved well productivity, there are concerns about slowing activity in U.S. basins that may impact future growth.
Additionally, while Freehold Royalties has maintained its production guidance and continues to offer a stable dividend yield, the decrease in U.S. gross drilling activity and the unchanged production forecast suggest limited immediate upside potential. The company’s ability to continue offering a stable and growing dividend amidst weaker commodity prices is a positive, yet it warrants a cautious approach, hence the Hold rating.
Mccrea covers the Energy sector, focusing on stocks such as Baytex Energy, Samoth Oilfield, and Parex Resources. According to TipRanks, Mccrea has an average return of 21.1% and a 59.40% success rate on recommended stocks.