Stifel Nicolaus analyst David Round maintained a Buy rating on Jadestone Energy Inc (JSE – Research Report) today and set a price target of p70.00.
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David Round has given his Buy rating due to a combination of factors that highlight Jadestone Energy Inc’s strategic moves and financial health. The company’s recent divestment of its 9.52% stake in the Sinphuhorm gas field for $39.4 million is seen as a smart decision to enhance value for shareholders by focusing on core assets and strengthening the balance sheet. This transaction not only aligns with the field’s carried value but also suggests that the market has been undervaluing Jadestone’s assets, as evidenced by the significant internal rate of return achieved from the sale.
Furthermore, the sale of this non-core asset allows Jadestone to streamline its operations and potentially close the gap between its market value and the net asset value, which currently stands at 70p per share. The cash influx from the sale supports the company’s financial position and underpins the valuation of other key assets, such as the Akatara onshore gas project. With these strategic maneuvers, Jadestone is well-positioned to meet its production targets and improve its market valuation, justifying the Buy rating.