ARC Resources (ARX) AI Stock Analysis

• Market Cap: C$16.63B
• Dividend Yield: 2.95%
• Average Volume (3M): 4.68M
• Price to Earnings (P/E): 14.2
• Beta (1Y): 0.54
• Revenue Growth: 15.61%
• EPS Growth: 12.15%
• Country: CA
• Employees: 438
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Exploration & Production
• EPS (TTM): 0.45
• Shares Outstanding: 571,164,250
• 10 Day Avg. Volume: 4,995,177
• 30 Day Avg. Volume: 4,677,921
• PEG Ratio: 0.74
• Price to Book (P/B): 1.81
• Price to Sales (P/S): 2.46
• P/FCF Ratio: 11.92
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$27.82
• Price Target Upside: -4.46% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12
• EPS Forecast (FY): 2.04
• Revenue Forecast (FY): C$6.13B

• Rating: 71 Outperform
• Price Target: C$32.00 ▲(9.89% Upside)
• Action: Upgraded Date: 03/07/26
• Date: Action: Upgraded 03/07/26

The score is driven mainly by solid financial performance with strong earnings and operating cash flow, tempered by margin compression, weaker free-cash-flow conversion, and higher 2025 leverage. Technicals are supportive with price above key moving averages and positive MACD. Valuation is favorable with a moderate P/E and ~3% dividend yield.

Positive Factors

Operating Cash Generation

Consistent operating cash flow well above net income provides durable internal financing for sustaining capital, operations, and distributions. This cash-generation strength improves resilience through commodity cycles, lowers near-term refinancing need, and supports reinvestment for 2–6 month planning horizons.

Recent Profitability and Revenue Recovery

A return to revenue growth and healthy operating/net margins indicates the business can generate profits when market conditions permit. This demonstrates execution on production and pricing, supporting sustainable cash flows, enabling disciplined capital allocation and preserving optionality across the commodity cycle.

Strategic Western Canada Asset Base

A concentrated asset portfolio in Alberta and B.C. provides scale in core Canadian resource plays and proximity to North American markets and midstream infrastructure. This structural positioning supports consistent market access, operational efficiencies, and the ability to optimize netbacks over multiple months and years.

Negative Factors

Rising Leverage

A material rise in debt reduces financial flexibility and increases refinancing and covenant risk if commodity prices weaken. Higher leverage can constrain capital allocation, force cutbacks to growth or distributions, and amplify downside over the next several months if cash flow weakens.

Weak Free-Cash-Flow Conversion

Declining FCF conversion signals heavier sustaining/growth capex or working-capital drag, limiting cash available for debt paydown or shareholder returns. Over 2–6 months this reduces the company's buffer against price swings and makes capital allocation choices more constrained.

Margin Compression and Cyclicality

Significant margin compression underscores sensitivity to commodity prices, costs, and differentials. That cyclicality makes earnings and free cash flow less predictable, complicating multi-month planning for capex, dividends, and debt management, and raising the bar for sustained performance.

ARC Resources Business Overview & Revenue Model

Company Description

ARC Resources Ltd. explores, develops, and produces crude oil, natural gas, and natural gas liquids in Canada. The company holds interests in the Montney properties located in northeast British Columbia and northern Alberta; and Pembina Cardium properties in central Alberta. As of December 31, 2020, it had proved plus probable reserves of 929 millions of barrels of oil equivalent. ARC Resources Ltd. was founded in 1996 and is headquartered in Calgary, Canada.

How the Company Makes Money

ARC Resources makes money primarily by producing and selling hydrocarbons—natural gas, condensate, and crude oil—at prevailing market prices. Revenue is generated through (1) sales of natural gas (typically priced using Canadian and/or North American natural gas benchmarks, with realized pricing affected by location differentials, transportation, and seasonal/market conditions); (2) sales of liquids such as condensate and crude oil (generally priced off light oil benchmarks with adjustments for quality and location); and (3) associated by-products (if any) marketed alongside production. The company’s earnings are influenced by production volumes, realized commodity prices, and operating and capital efficiency. ARC commonly uses midstream and downstream service providers for gathering, processing, fractionation (for natural gas liquids), and pipeline transportation; these arrangements enable market access but also create costs that affect netbacks. Like many upstream producers, ARC may use commodity price risk management (hedging) to reduce cash-flow volatility; gains or losses from these contracts can impact reported revenue/realized pricing depending on accounting treatment. Profitability is further driven by royalties and production taxes, operating expenses, transportation and processing fees, sustaining and growth capital spending, and the company’s ability to replace and expand reserves through development and acquisitions/divestitures. null

ARC Resources Financial Statement Overview

Summary

Strong underlying profitability and operating cash generation, but results are cyclical with notable margin compression and weaker free-cash-flow conversion in 2024–2025. Leverage stepped up in 2025, reducing flexibility if commodity prices weaken.

Income Statement

Profitability is strong in the most recent annual period (2025), with healthy operating and net profitability, and revenue returning to growth. That said, results are clearly cyclical: revenue and profits peaked in 2022, declined through 2023–2024, and margins have compressed meaningfully from 2022–2023 levels (including a sharp drop in gross profitability in 2025 versus 2024). The 2020 loss also highlights commodity-driven volatility.

Balance Sheet

The balance sheet is generally solid with a sizeable equity base and good profitability on equity in recent years (positive from 2021–2025). However, leverage has increased notably in 2025, with total debt rising sharply versus 2024 and the debt load becoming less conservative than the prior few years. While still not extreme, the higher leverage reduces flexibility if the commodity cycle turns.

Cash Flow

Cash generation remains strong, with operating cash flow consistently exceeding net income by a wide margin across recent years, supporting resilience and reinvestment capacity. The key weakness is conversion to free cash flow: free cash flow is positive but has declined year-over-year in 2025 and remains well below net income in 2024–2025, suggesting heavier capital spending and/or working-capital drag that can pressure shareholder returns in weaker pricing environments.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	6.08B	5.10B	5.66B	8.64B	5.11B
Gross Profit	1.92B	2.83B	3.33B	5.55B	3.25B
EBITDA	3.33B	2.74B	3.39B	4.25B	1.98B
Net Income	1.28B	1.12B	1.60B	2.30B	786.60M
Balance Sheet
Total Assets	15.76B	13.10B	12.38B	11.62B	11.38B
Cash, Cash Equivalents and Short-Term Investments	7.00M	0.00	1.10M	57.10M	0.00
Total Debt	4.83B	2.39B	2.21B	1.79B	2.57B
Total Liabilities	7.49B	5.15B	4.96B	4.97B	5.45B
Stockholders Equity	8.26B	7.95B	7.43B	6.65B	5.93B
Cash Flow
Free Cash Flow	1.26B	546.90M	567.80M	2.41B	953.90M
Operating Cash Flow	3.09B	2.35B	2.39B	3.83B	2.01B
Investing Cash Flow	-3.54B	-1.91B	-1.69B	-1.41B	-808.10M
Financing Cash Flow	449.50M	-443.50M	-759.60M	-2.36B	-1.20B

ARC Resources Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 29.12
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ARX, the sentiment is Positive. The current price of 29.12 is above the 20-day moving average (MA) of 26.52, above the 50-day MA of 25.31, and above the 200-day MA of 26.07, indicating a bullish trend. The MACD of 0.98 indicates Negative momentum. The RSI at 77.05 is Negative, neither overbought nor oversold. The STOCH value of 90.91 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:ARX.

ARC Resources Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PEY	78 Outperform	C$5.84B	10.89	15.30%	5.77%	11.52%	24.76%
SCR	76 Outperform	C$8.42B	-15.31	17.87%	2.99%	-11.41%	40.81%
ARX	71 Outperform	C$16.63B	14.20	15.52%	2.95%	15.61%	12.15%
WCP	71 Outperform	$18.12B	11.60	10.14%	6.33%	36.36%	-19.92%
TOU	69 Neutral	C$26.90B	89.45	8.69%	4.79%	8.97%	-21.15%
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%

ARC Resources Corporate Events

ARC Resources Confirms Quarterly Dividend, Underscoring Stable Payouts

ARC Resources Ltd. has confirmed a quarterly dividend of $0.21 per share, payable on April 15, 2026, to shareholders of record as of March 31, 2026. The announcement brings the company’s trailing 12-month shareholder payments to $0.78 per share, underscoring its continued emphasis on returning capital and highlighting the stability of its dividend program for investors.

The maintained payout reflects ARC’s confidence in its low-cost Montney operations and financial strength, reinforcing its positioning as a leading Canadian dividend-paying energy company. For income-focused investors, the confirmation signals ongoing reliability of cash returns amid broader energy market volatility and supports ARC’s appeal within the Canadian energy equity universe.

The most recent analyst rating on (TSE:ARX) stock is a Buy with a C$28.00 price target. To see the full list of analyst forecasts on ARC Resources stock, see the TSE:ARX Stock Forecast page.

ARC Resources to Issue C$950 Million in Senior Unsecured Notes

ARC Resources Ltd. has launched a C$950 million offering of senior unsecured notes, split between C$400 million of 3.349% Series 5 notes due 2029 and C$550 million of 4.104% Series 6 notes due 2033, with Morningstar DBRS assigning a provisional BBB rating with a Stable trend. The company plans to use the proceeds to redeem C$450 million of existing Series 1 notes and fully repay a C$500 million term loan, a move that refines its debt profile and may lower refinancing risk while reinforcing its investment-grade positioning in Canadian credit markets.

The most recent analyst rating on (TSE:ARX) stock is a Hold with a C$25.50 price target. To see the full list of analyst forecasts on ARC Resources stock, see the TSE:ARX Stock Forecast page.

ARC Resources Delivers Record 2025 Output, Cash Flow and Reserves as Montney Strategy Advances

ARC Resources reported record 2025 results, with fourth-quarter production reaching 408,382 boe per day and full-year output averaging 374,336 boe per day, both up 10 per cent on a per-share basis versus 2024. Strong funds from operations of $3.2 billion and free funds flow of $1.3 billion enabled the company to return 75 per cent of free funds flow to shareholders through dividends and buybacks, while reducing net debt to $2.9 billion and supporting continued investment. ARC highlighted premium natural gas realizations relative to AECO for the 13th consecutive year, disciplined curtailments at Sunrise to preserve value, and ongoing portfolio high-grading through a $1.6 billion Kakwa Montney acquisition completed in mid-2025 and an additional Kakwa asset purchase agreement for $160 million signed after year-end. The company also advanced strategic growth and Indigenous partnerships via a development agreement covering up to 36 Montney sections with the Tsaa Dunne Za Energy Limited Partnership and reinforced its future LNG exposure through a long-term offtake deal tied to the Cedar LNG project. Reserves reached record levels, with proved developed producing and total proved plus probable reserves up 15 per cent and nine per cent, respectively, and the company extending its multi-decade track record of strong reserve replacement and positive technical revisions, underscoring long-term resource depth and value for stakeholders.

The most recent analyst rating on (TSE:ARX) stock is a Hold with a C$28.00 price target. To see the full list of analyst forecasts on ARC Resources stock, see the TSE:ARX Stock Forecast page.