ARC Resources, the Energy sector company, was revisited by a Wall Street analyst today. Analyst Randy Ollenberger from BMO Capital downgraded the rating on the stock to a Hold and gave it a C$32.00 price target.
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Randy Ollenberger has given his Hold rating due to a combination of factors related to ARC Resources’ pending acquisition by Shell and limited upside from the current share price. With a firm takeover agreement in place at a defined consideration and the stock expected to trade in a tight band until closing, he sees little scope for meaningful outperformance despite raising his price target to $32.
He also notes that broader Canadian natural gas market conditions remain difficult, which tempers the near-term outlook for gas-weighted producers. Although ARC benefits from high-quality condensate and gas assets that leave it better positioned than many peers, he judges that this relative strength is already largely reflected in the valuation, justifying a neutral, Hold stance at this stage.