In a report released on October 31, Michael Barth, CFA from Raymond James maintained a Hold rating on Imperial Oil, with a price target of C$109.00.
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Michael Barth, CFA has given his Hold rating due to a combination of factors that reflect both positive performance and cautious outlooks. The company’s financial results showed a modest beat in Funds From Operations (FFO) when excluding a restructuring charge, and production levels slightly exceeded expectations, driven by record output from the Kearl site. However, despite these positive aspects, downstream throughput, while ahead of estimates, saw net petroleum product sales fall below expectations.
Additionally, capital expenditures were lower than anticipated, and the company’s capital allocation strategy remains unchanged, with plans to accelerate the Normal Course Issuer Bid (NCIB) by the end of the year. While the company’s execution in both upstream and downstream operations is strong, Imperial Oil has already significantly outperformed the broader Canadian energy sector year-to-date. This performance, combined with the current market conditions, suggests that the stock’s momentum may not continue at the same pace, justifying the Hold rating.
Based on the recent corporate insider activity of 63 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of IMO in relation to earlier this year.