Analyst Randy Ollenberger of BMO Capital maintained a Hold rating on Peyto Exploration & Dev (PEY – Research Report), retaining the price target of C$18.50.
Randy Ollenberger’s rating is based on Peyto Exploration & Dev’s strategic hedging program, which has effectively supported its high-yield dividend despite the downturn in gas prices. The company’s extensive hedging through 2025 and 2026 provides a buffer against price volatility, ensuring financial stability. However, this same hedging strategy limits Peyto’s ability to capitalize on potential price increases, particularly with the anticipated benefits from LNG Canada. While the hedges are currently favorable, the lack of exposure to floating AECO prices means Peyto may miss out on significant upside opportunities. Additionally, Peyto’s operational performance, including consistent production and capital spending, aligns with expectations, but the constrained upside potential tempers the overall outlook. Therefore, the Hold rating reflects a balance between the company’s financial resilience and its limited growth prospects in a potentially improving market.
In another report released on March 10, RBC Capital also maintained a Hold rating on the stock with a C$18.00 price target.
PEY’s price has also changed slightly for the past six months – from C$14.310 to C$15.640, which is a 9.29% increase.