Baytex Energy (BTE) AI Stock Analysis

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TSE:BTE Dividends

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Baytex Energy

(TSX:BTE)

73Outperform

Baytex Energy demonstrates strong financial performance and positive earnings call outcomes, indicating robust operational efficiency and growth potential. Despite reasonable valuation metrics, technical analysis suggests caution due to bearish trends. Risks such as oil price volatility and tariffs present potential challenges.

Positive Factors

Cost Efficiency

There are notable improvements in Eagle Ford well efficiency, despite slight inflationary cost pressures.

Financial Performance

Quarterly production and cash flow exceeded expectations, which should please investors.

Operational Performance

Baytex continues to shine in the Clearwater play, which is one of the top areas for energy production in Canada.

Negative Factors

Financial Risk

High leverage in a highly volatile environment has led to a reduction in the target price for Baytex.

Market Volatility

The target price is being lowered to reflect volatility, lower crude price assumptions, and slightly higher cash costs.

Production Levels

A reduction in non-operated Eagle Ford volumes is expected due to reduced activity.

Baytex Energy (BTE) vs. S&P 500 (SPY)

Market Cap

$1.87B

Dividend Yield3.78%

Average Volume (3M)5.73M

Price to Earnings (P/E)8.2

Beta (1Y)1.75

Revenue Growth22.71%

EPS GrowthN/A

CountryCA

Employees370

SectorEnergy

Sector Strength53

IndustryOil & Gas Exploration & Production

Share Statistics

EPS (TTM)0.29

Shares Outstanding773,589,970

10 Day Avg. Volume8,493,093

30 Day Avg. Volume5,728,264

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.65

Price to Cash Flow (P/CF)1.30

P/FCF Ratio6.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$4.51

Price Target Upside86.17% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering8

Baytex Energy Business Overview & Revenue Model

Company DescriptionBaytex Energy Corp. is a Canadian-based oil and gas company engaged in the acquisition, development, and production of crude oil and natural gas across North America. The company operates primarily in the Western Canadian Sedimentary Basin and the Eagle Ford in the United States, focusing on heavy oil, light oil, and shale gas extraction. Baytex Energy is committed to responsible resource development and emphasizes operational excellence and environmental stewardship.

How the Company Makes MoneyBaytex Energy generates revenue primarily through the exploration, extraction, and sale of crude oil and natural gas. The company's key revenue streams include the sale of heavy oil, light oil, and natural gas liquids, as well as shale gas from its operations in Canada and the United States. Baytex optimizes its earnings by leveraging advanced extraction technologies and maintaining strategic partnerships for joint ventures and infrastructure access. Additionally, the company actively manages its commodity price exposure through hedging strategies to stabilize cash flows and ensure profitability despite market volatility.

Baytex Energy Financial Statement Overview

Summary

Baytex Energy has shown strong financial performance with significant revenue growth and profitability improvements. The balance sheet indicates moderate leverage and a solid equity base, while cash flow statements highlight robust cash generation capabilities. However, conversion of net income to free cash flow could be improved.

Income Statement

Positive

Baytex Energy demonstrated significant revenue growth of 55.18% from the prior year. The company achieved a strong gross profit margin of 24.36% and a positive net profit margin of 5.62%, a turnaround from the previous year's net loss. EBITDA margin is quite robust at 46.69%, indicating healthy operational efficiency. However, the lack of EBIT data precludes a full assessment of operating profitability.

Balance Sheet

Positive

The company's debt-to-equity ratio stands at 0.55, indicating moderate leverage. The return on equity is 5.67%, which shows a decent return on shareholder investment. Equity ratio of 53.76% suggests that more than half of the company's assets are financed by equity, which is a positive indicator of financial stability.

Cash Flow

Very Positive

The company's free cash flow growth rate is impressive at 147.80%, supported by strong operating cash flow. The operating cash flow to net income ratio of 8.06 indicates high cash generation relative to reported net income. However, the free cash flow to net income ratio of 2.51 shows a lower conversion rate of net income into free cash flow.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
4.21B	2.71B	2.89B	1.87B	975.48M
	Gross Profit
1.03B	750.68M	1.08B	603.51M	-82.80M
	EBIT
0.00	643.19M	943.57M	521.68M	-150.84M
	EBITDA
1.97B	723.50M	1.58B	2.27B	-1.99B
	Net Income Common Stockholders
236.60M	-233.36M	855.61M	1.61B	-2.44B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
16.61M	55.81M	5.46M	-7.76M	-11.08M
	Total Assets
7.76B	7.46B	5.10B	4.83B	3.41B
	Total Debt
2.28B	2.44B	937.17M	1.39B	1.79B
	Net Debt
2.27B	2.38B	931.70M	1.40B	1.80B
	Total Liabilities
3.59B	3.64B	2.07B	2.62B	2.83B
	Stockholders Equity
4.17B	3.83B	3.03B	2.21B	578.21M
Cash Flow		Free Cash Flow
593.85M	239.61M	648.83M	396.62M	70.48M
	Operating Cash Flow
1.91B	1.30B	1.17B	712.38M	353.10M
	Investing Cash Flow
-1.28B	-1.51B	-488.99M	-310.76M	-314.47M
	Financing Cash Flow
-668.17M	266.25M	-678.42M	-401.62M	-44.20M

Baytex Energy Technical Analysis

Technical Analysis Sentiment

Negative

Last Price2.42

Price Trends

50DMA

3.02

Negative

100DMA

3.34

Negative

200DMA

3.87

Negative

Market Momentum

MACD

-0.24

Positive

RSI

41.16

Neutral

STOCH

53.98

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:BTE, the sentiment is Negative. The current price of 2.42 is below the 20-day moving average (MA) of 2.73, below the 50-day MA of 3.02, and below the 200-day MA of 3.87, indicating a bearish trend. The MACD of -0.24 indicates Positive momentum. The RSI at 41.16 is Neutral, neither overbought nor oversold. The STOCH value of 53.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:BTE.

Baytex Energy Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CVE	76 Outperform	$28.83B	9.42	10.88%	4.28%	3.97%	-22.22%
WCP	74 Outperform	C$4.81B	6.00	14.51%	8.83%	3.34%	-6.99%
BTE	73 Outperform	$1.87B	8.22	5.99%	3.78%	22.71%	―
MEG	73 Outperform	$5.37B	11.06	11.22%	1.44%	-8.92%	-5.46%
ARX	71 Outperform	$16.13B	14.56	14.67%	2.60%	-9.83%	-27.76%
TOU	71 Outperform	C$22.26B	16.80	8.55%	2.43%	-8.29%	-30.52%
Sector *	55 Neutral	$7.05B	3.47	-6.10%	6.00%	-0.44%	-51.04%

* Energy Sector Average

Performance Comparison

TSE:BTE

Baytex Energy

2.42

-2.47

-50.50%

TSE:MEG

MEG Energy

20.93

-9.93

-32.17%

TSE:CVE

Cenovus Energy

16.75

-11.10

-39.86%

TSE:ARX

ARC Resources

27.52

3.29

13.56%

TSE:WCP

Whitecap Resources

8.19

-1.46

-15.13%

TSE:TOU

Tourmaline Oil

62.59

0.31

0.50%

Baytex Energy Earnings Call Summary

Earnings Call Date: Mar 4, 2025 | % Change Since: -18.44% | Next Earnings Date: May 5, 2025

Earnings Call Sentiment Positive

Baytex Energy demonstrated notable operational and financial achievements in 2024, with strong production growth, debt reduction, and shareholder returns. However, challenges such as tariffs, oil price volatility, and FX impacts on debt reporting pose potential risks.

Highlights

Production and Reserves Growth

Baytex Energy achieved a 10% production per share growth and grew reserves per share across all categories in 2024. They replaced over 100% of production on both 1P and 2P bases.

Debt Reduction and Cash Flow

The company reduced net debt by 5% in Canadian dollars and 13% in U.S. dollars. They generated $656 million in free cash flow, with 70% generated in the second half of 2024.

Operational Efficiency Improvements

Baytex reported an 8% improvement in drilling and completion costs per completed lateral foot in the Eagle Ford, and they are working towards a further 7% improvement.

Shareholder Returns

In 2024, Baytex repurchased 48 million common shares, representing 6% of shares outstanding, and declared four quarterly dividends of 2.25 cents per share.

Strong Free Cash Flow Forecast for 2025

Baytex expects to generate approximately $400 million of free cash flow in 2025 at US $70 WTI, continuing their disciplined capital allocation.

Lowlights

Tariffs Impact on Canadian Operations

The implementation of new tariffs on Canadian energy imports to the U.S. could disproportionately impact Midwest refiners and affect Baytex's operations.

Oil Price Volatility Concerns

There is increasing bearishness in the oil market, with potential declines in oil prices affecting capital allocation decisions.

FX Impact on Debt Reporting

The strengthening U.S. dollar increases the Canadian dollar-denominated debt reporting, making it challenging to reflect true debt reduction.

Company Guidance

During the Baytex Energy Corp fourth quarter and year-end conference call, the company highlighted several key metrics reflecting their 2024 performance and guidance. Baytex reported a 10% growth in production per share and a 13% increase in 2P net asset value per share. They improved their cash cost structure by 5% on a barrel of oil equivalent (BOE) basis and achieved a reduction in net debt by 5% in Canadian dollar terms and 13% in U.S. dollar terms. Importantly, Baytex replaced over 100% of their production on both 1P and 2P bases, demonstrating strong reserve growth. The company generated free cash flow of $656 million, with over 70% of it produced in the second half of the year, and they repurchased 48 million common shares, representing 6% of shares outstanding. For 2025, Baytex anticipates generating approximately $400 million in free cash flow at a WTI price of US $70, maintaining exploration and development expenditures between $1.2 billion to $1.3 billion, and targeting a production level of 150,000 BOE per day at the midpoint of their guidance.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.