ARC Resources (ARX) AI Stock Analysis

• Market Cap: C$15.09B
• Dividend Yield: 2.95%
• Average Volume (3M): 3.20M
• Price to Earnings (P/E): 11.2
• Beta (1Y): 0.83
• 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: 571,370,600
• 10 Day Avg. Volume: 3,948,569
• 30 Day Avg. Volume: 3,203,819
• PEG Ratio: -0.50
• Price to Book (P/B): 1.95
• Price to Sales (P/S): 3.04
• P/FCF Ratio: 28.36
• 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$30.14
• Price Target Upside: 14.13% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 74 Outperform
• Price Target: C$26.00 ▼(-1.55% Downside)

The score is driven primarily by strong underlying financial profitability with manageable leverage, plus a constructive earnings-call outlook emphasizing higher 2026 production and full free-cash-flow returns to shareholders. Valuation is supportive (low P/E and ~3% yield), while technical signals are mixed with neutral momentum and the stock still below its 200-day average.

Positive Factors

High Profitability Margins

Sustained high gross and net margins indicate strong operating economics and cost control across ARC's asset base. This margin buffer improves resilience to commodity swings, supports consistent cash generation, funds reinvestment and shareholder returns, and underpins durable earnings power.

Strong Cash Generation and FCF

Robust operating cash flow and material free cash flow provide financial flexibility to fund capex, debt servicing, dividends and buybacks. A multi-year trend of positive FCF supports a sustainable shareholder return policy and lowers reliance on external financing over the medium term.

Accretive Asset Acquisition & Growth Outlook

Successful integration of Kakwa and clear 2026 production guidance point to scalable resource development and execution capability. Asset-led growth combined with optimization upside supports durable volume expansion, higher liquids mix, and structural improvements to cash per share over time.

Negative Factors

Commodity Price Exposure

ARC's earnings and cash flow are materially driven by commodity prices and receipt differentials. This structural exposure means profits and FCF can swing across cycles, complicating long-range planning for capex, dividends and deleveraging even with otherwise strong unit economics.

Higher Net Debt Post-Acquisition

Elevated post-acquisition leverage reduces balance-sheet headroom and raises interest and refinancing sensitivity. While still manageable, higher debt constrains optionality for incremental M&A or capex during downturns and increases the need for consistent FCF to meet obligations and maintain payouts.

Operational Execution Risk

Operational setbacks like water issues at Attachie and market-driven curtailments at Sunrise highlight execution and location-specific operational risk. Such issues can delay production, increase unit operating costs and require additional capital or remediation, reducing near-term volume and cash reliability.

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 generates revenue through the sale of crude oil, natural gas, and natural gas liquids (NGLs) produced from its extensive portfolio of assets. The company's revenue model is primarily based on the production and sale of these hydrocarbons to various markets, including domestic and international buyers. ARC Resources leverages its advanced technology and operational expertise to maximize recovery rates and optimize production efficiency. Key revenue streams include long-term sales contracts, spot market sales, and potential hedging strategies to mitigate price volatility. The company's earnings are significantly influenced by global commodity prices, production volumes, and operational costs. Additionally, strategic partnerships and joint ventures can enhance its access to markets and infrastructure, contributing to its financial performance.

ARC Resources Financial Statement Overview

Summary

Strong profitability (TTM gross margin ~57%, net margin ~26%) and solid balance sheet leverage (debt-to-equity ~0.35) support a good base score. Offsets include commodity-driven earnings volatility, slightly higher debt vs. 2024, and weaker TTM free-cash-flow conversion vs. net income (~0.40).

Income Statement

TTM (Trailing-Twelve-Months) shows strong profitability with healthy gross profit (~57%) and net margin (~26%), alongside solid operating profitability. Revenue is modestly up in TTM (~3%) after a slight decline in 2024, but results have been volatile over the cycle (very strong 2022 followed by lower 2023–2024 vs. that peak). The company remains meaningfully profitable in recent periods, though earnings power is clearly tied to commodity-driven swings.

Balance Sheet

Leverage looks manageable with debt-to-equity around ~0.35 in TTM (and ~0.30 in 2024), supporting financial flexibility. Equity has steadily grown versus earlier years, and returns on equity are attractive in TTM (~19%), albeit below the 2022 peak and down from 2023 levels. A key watch item is that total debt increased in TTM versus 2024, which slightly weakens the otherwise solid balance sheet profile.

Cash Flow

Cash generation is strong on an absolute basis, with TTM operating cash flow of ~$3.1B and free cash flow of ~$1.3B, and TTM free cash flow growth notably positive. However, free cash flow conversion versus net income is relatively low in TTM (~0.40) compared with prior years, suggesting higher reinvestment, working-capital swings, or other cash flow variability. Operating cash flow relative to net income remains supportive in TTM, but also below the stronger 2023–2024 conversion levels.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.85B	5.10B	5.66B	8.64B	5.11B	1.13B
Gross Profit	3.01B	2.83B	3.33B	5.55B	3.25B	687.10M
EBITDA	3.28B	2.74B	3.39B	4.25B	1.98B	566.10M
Net Income	1.39B	1.12B	1.60B	2.30B	786.60M	-547.20M
Balance Sheet
Total Assets	15.18B	13.10B	12.38B	11.62B	11.38B	4.95B
Cash, Cash Equivalents and Short-Term Investments	3.00M	0.00	1.10M	57.10M	0.00	400.00K
Total Debt	3.85B	2.39B	2.21B	1.79B	2.57B	751.10M
Total Liabilities	6.98B	5.15B	4.96B	4.97B	5.45B	2.16B
Stockholders Equity	8.20B	7.95B	7.43B	6.65B	5.93B	2.79B
Cash Flow
Free Cash Flow	1.31B	546.90M	567.80M	2.41B	953.90M	320.90M
Operating Cash Flow	3.08B	2.35B	2.39B	3.83B	2.01B	655.70M
Investing Cash Flow	-3.48B	-1.91B	-1.69B	-1.41B	-808.10M	-364.30M
Financing Cash Flow	410.50M	-443.50M	-759.60M	-2.36B	-1.20B	-299.50M

ARC Resources Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 26.41
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 26.41 is above the 20-day moving average (MA) of 24.60, above the 50-day MA of 25.16, and above the 200-day MA of 26.32, indicating a bullish trend. The MACD of 0.19 indicates Negative momentum. The RSI at 63.49 is Neutral, neither overbought nor oversold. The STOCH value of 60.73 is Neutral, 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	81 Outperform	C$5.21B	13.68	13.48%	5.77%	11.52%	24.76%
ARX	74 Outperform	C$15.09B	11.18	17.02%	2.95%	15.61%	12.15%
WCP	74 Outperform	C$15.22B	10.70	10.88%	6.33%	36.36%	-19.92%
NVA	74 Outperform	C$3.68B	11.72	13.57%	―	-6.14%	14.09%
TOU	73 Outperform	C$24.23B	17.83	8.69%	4.79%	8.97%	-21.15%
SCR	69 Neutral	C$5.82B	5.30	9.60%	2.99%	-11.41%	40.81%
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%

ARC Resources Corporate Events

ARC Resources Reports Robust Q3 2025 Results and Announces 2026 Budget

ARC Resources Ltd. reported a strong third quarter in 2025 with a 10% year-over-year increase in production and a significant rise in crude oil and condensate output. The company announced an 11% dividend increase, reflecting its commitment to shareholder returns. ARC’s 2026 capital budget is set between $1.8 and $1.9 billion, aiming for record production levels and substantial free funds flow, which will be returned to shareholders through dividends and share repurchases.

The most recent analyst rating on (TSE:ARX) stock is a Buy with a C$33.00 price target. To see the full list of analyst forecasts on ARC Resources stock, see the TSE:ARX Stock Forecast page.