BMO Capital analyst Randy Ollenberger maintained a Hold rating on Strathcona Resources (SCR – Research Report) yesterday and set a price target of C$35.00.
Randy Ollenberger’s rating is based on a combination of factors that present both opportunities and challenges for Strathcona Resources. The company reported lower-than-expected cash flow primarily due to reduced price realizations in its Lloydminster heavy segment, although production figures were in line with expectations. Despite this, there are positive indicators such as robust year-to-date production, a potential increase in 2025 guidance, a 4% dividend hike, and strong reserve growth.
Moreover, Strathcona’s ability to mitigate tariff impacts through financial hedges and market exposure, along with improved trading liquidity, are favorable aspects. However, the limited trading liquidity due to a small float could potentially hinder share price growth. These mixed results and the outlook for improved heavy oil prices in the future contribute to the Hold rating, as the potential benefits are balanced by the liquidity constraints.
SCR’s price has also changed moderately for the past six months – from C$29.310 to C$24.100, which is a -17.78% drop .