Analyst Tariq Saad from BMO Capital maintained a Hold rating on Cardinal Energy (CJ – Research Report) and keeping the price target at C$7.50.
Tariq Saad has given his Hold rating due to a combination of factors affecting Cardinal Energy’s financial and operational outlook. The company’s recent financial results were largely in line with expectations, but the capital spending was notably higher than consensus due to accelerated investments in the Reford project. This increased spending is expected to continue into the first half of 2025, with a significant portion of the 2025 budget being allocated during this period.
Furthermore, while Cardinal’s net debt is projected to rise and peak in the third quarter of 2025, the anticipated cash flow from Reford coming online should aid in reducing this debt. Despite the company’s steady production and promising future free cash flow yield, its current valuation appears higher than its peers, which may limit upside potential. These factors, combined with the secured funding for Reford and the company’s strategic focus, contribute to the Hold rating, as some peers might offer more attractive opportunities.
In another report released on February 26, CIBC also maintained a Hold rating on the stock with a C$8.00 price target.
Based on the recent corporate insider activity of 32 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of CJ in relation to earlier this year.