Baytex Energy (BTE) AI Stock Analysis

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Baytex Energy

(TSX:BTE)

Rating:67Neutral

Price Target:

C$2.50

▲(0.00%Upside)

Baytex Energy's score of 67 reflects a strong financial position and effective management of cash flows and debt, underscored by robust free cash flow generation. However, technical indicators and valuation metrics suggest room for caution amid commodity price pressures and shares underperforming relative to asset quality. The mixed sentiment from the earnings call further supports a cautious but optimistic outlook.

Positive Factors

Dividends

The company reported a Q1 beat and increased its dividend by 3%.

Earnings

Q4 results were ahead of expectations, which is likely to please investors.

Operational Efficiency

The company plans to bring on 50 net wells in the Eagle Ford during the year and expects to see a 7% improvement in opex costs compared to previous years.

Negative Factors

Debt Management

Investors were likely hoping for a more aggressive spending cut, to protect against an elevated balance sheet if low commodity prices persist.

Market Volatility

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

Stock Recommendation

There is a downgrade to SELL based on Q1 results as pre-released.

Baytex Energy (BTE) vs. iShares MSCI Canada ETF (EWC)

Market Cap

$1.88B

Dividend Yield3.69%

Average Volume (3M)5.71M

Price to Earnings (P/E)6.1

Beta (1Y)1.73

Revenue Growth10.55%

EPS GrowthN/A

CountryCA

Employees370

SectorEnergy

Sector Strength42

IndustryOil & Gas Exploration & Production

Share Statistics

EPS (TTM)0.09

Shares Outstanding768,600,000

10 Day Avg. Volume5,262,905

30 Day Avg. Volume5,707,739

Financial Highlights & Ratios

PEG Ratio0.18

Price to Book (P/B)0.45

Price to Sales (P/S)0.00

P/FCF Ratio2.74

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$4.02

Price Target Upside60.89% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering7

Baytex Energy Business Overview & Revenue Model

Company DescriptionBaytex Energy Corp., an oil and gas company, acquires, develops, and produces oil and natural gas in the Western Canadian Sedimentary Basin and in the Texas, the United States. The company offers light oil and condensate, heavy oil, natural gas liquids, and natural gas. Its principal oil and natural gas properties comprise the Eagle Ford property in Texas, Viking and Lloydminster properties in Alberta and Saskatchewan, Peace River and Duvernay properties in Alberta. The company's properties also include conventional oil and natural gas assets in Western Canada. As of December 31, 2021, it had proved developed producing reserves of 129 million barrels of oil equivalent (mmboe); proved reserves of 278 mmboe; and proved plus probable reserves of 451 mmboe. Baytex Energy Corp. was founded in 1993 and is headquartered in Calgary, Canada.

How the Company Makes MoneyBaytex Energy generates revenue primarily through the exploration, development, and production of crude oil and natural gas. The company's key revenue streams include the sale of produced oil and natural gas liquids, as well as natural gas itself. The pricing of these commodities is influenced by global market conditions, which can significantly impact the company's earnings. Baytex also focuses on maintaining a balanced portfolio of assets, optimizing production efficiency, and implementing cost-control measures to maximize profitability. Strategic partnerships and joint ventures in prolific oil-producing regions, such as the Eagle Ford shale, further support its revenue generation by providing access to advanced technology and expertise, enhancing operational efficiencies, and potentially increasing production volumes.

Baytex Energy Earnings Call Summary

Earnings Call Date:May 05, 2025

(Q1-2025)

% Change Since: 17.92%|

Next Earnings Date:Jul 31, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mixed outlook, with strong financial management, including free cash flow generation and debt reduction, as highlights. However, challenges such as commodity price pressure and share price underperformance were notable lowlights.

Q1-2025 Updates

Positive Updates

Free Cash Flow Generation

Generated $53 million in free cash flow in Q1 2025, up from zero in the first quarter of last year. Expecting $200 million of free cash flow in 2025 assuming $60 per barrel WTI.

Debt Reduction

Net debt reduced by 10% over the last 12 months, with further plans to allocate 100% of free cash flow to debt repayment after dividends.

Production Increase

Delivered production of 144,200 BOE per day, a 2% increase in production per share compared to Q1 2024.

Strong Asset Performance

Continued strong performance in key assets like Eagle Ford and Western Canada, with strategic development in Pembina Duvernay and Peavine.

Negative Updates

Commodity Price Pressure

WTI prices softened to the US $55 to $60 per barrel range, down from a high of $80 in early January.

CapEx Reduction

Adjusted CapEx towards the low end of the range due to current commodity price environment, highlighting potential impacts on production.

Share Price Performance

Share price underperformance not reflecting the company's asset quality and long-term value creation potential.

Weather-Related Disruptions

First quarter production slightly lower year over year due to weather-related disruptions and the corroborate thermal disposition.

Company Guidance

During Baytex Energy Corp's first quarter 2025 conference call, the company provided guidance on several key financial metrics and strategic adjustments. The 2025 exploration and development (E&D) capital budget is set between $1.2 billion and $1.3 billion, supporting annual production of 148,000 to 152,000 barrels of oil equivalent (BOE) per day. However, given current oil price conditions, they anticipate capital expenditures and production to trend towards the low end of these ranges. Assuming a $60 per barrel WTI price for the remainder of the year, Baytex expects to generate approximately $200 million in free cash flow. The company plans to allocate 100% of this free cash flow to debt repayment after funding its quarterly dividend. As of March 31, 2025, Baytex's net debt stood at $2.4 billion, reflecting a 10% reduction over the past year. The company also highlighted its substantial financial flexibility, with credit facilities totaling CAD 1.5 billion, of which less than 20% is drawn, and its earliest note maturity is not until April 2030.

Baytex Energy Financial Statement Overview

Summary

Baytex Energy shows a solid financial position with a strong cash flow foundation and improving income statement metrics. The balance sheet is relatively stable, though moderate debt levels should be monitored. Overall, the company is well-positioned for potential growth in the oil & gas sector, but it should remain vigilant about operational efficiency and leverage.

Income Statement

Positive

The company demonstrates strong profitability with a high gross profit margin of 25.1% and a net profit margin of 8.0% in TTM (Trailing-Twelve-Months). Revenue growth has been volatile but shows improvement from previous losses, indicating a positive trajectory. However, fluctuations in EBIT and EBITDA margins suggest some instability in operational efficiency.

Balance Sheet

Positive

The balance sheet shows a healthy equity ratio of 53.7%, highlighting strong capital structure stability. However, a debt-to-equity ratio of 0.52 indicates moderate leverage, which could be a risk if debt levels rise. Return on equity is reasonable but not exceptional, reflecting average profitability on shareholder funds.

Cash Flow

Positive

Cash flow performance is robust, with a significant free cash flow growth rate of 15.2% in TTM (Trailing-Twelve-Months) and a strong operating cash flow to net income ratio of 6.11. The company efficiently converts its earnings into cash, which is crucial for sustaining operations and funding future growth.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
3.98B	4.21B	2.71B	2.89B	1.87B	975.48M
	Gross Profit
1.00B	1.03B	750.68M	1.08B	603.51M	-82.80M
	EBIT
831.89M	770.30M	643.19M	943.57M	521.68M	-150.84M
	EBITDA
2.05B	2.00B	723.50M	1.58B	2.27B	-1.99B
	Net Income Common Stockholders
320.23M	236.60M	-233.36M	855.61M	1.61B	-2.44B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
5.57M	16.61M	55.81M	5.46M	-7.76M	-11.08M
	Total Assets
5.91B	7.76B	7.46B	5.10B	4.83B	3.41B
	Total Debt
1.85B	2.28B	2.44B	937.17M	1.39B	1.79B
	Net Debt
1.84B	2.27B	2.38B	931.70M	1.40B	1.80B
	Total Liabilities
2.97B	3.59B	3.64B	2.07B	2.62B	2.83B
	Stockholders Equity
2.95B	4.17B	3.83B	3.03B	2.21B	578.21M
Cash Flow		Free Cash Flow
684.69M	593.85M	239.61M	648.83M	396.62M	70.48M
	Operating Cash Flow
1.96B	1.91B	1.30B	1.17B	712.38M	353.10M
	Investing Cash Flow
-1.23B	-1.28B	-1.51B	-488.99M	-310.76M	-314.47M
	Financing Cash Flow
-744.14M	-668.17M	266.25M	-678.42M	-401.62M	-44.20M

Baytex Energy Technical Analysis

Technical Analysis Sentiment

Positive

Last Price2.50

Price Trends

50DMA

2.40

Positive

100DMA

2.87

Negative

200DMA

3.44

Negative

Market Momentum

MACD

>-0.01

Negative

RSI

54.50

Neutral

STOCH

63.86

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:BTE, the sentiment is Positive. The current price of 2.5 is above the 20-day moving average (MA) of 2.35, above the 50-day MA of 2.40, and below the 200-day MA of 3.44, indicating a neutral trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 54.50 is Neutral, neither overbought nor oversold. The STOCH value of 63.86 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:BTE.

Baytex Energy Peers Comparison

Overall Rating

UnderperformOutperform

Sector (57)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BTE	67 Neutral	$1.88B	6.09	8.02%	3.69%	10.55%	―
Sector *	57 Neutral	$7.22B	3.15	-4.49%	5.63%	0.82%	-49.15%
AAVVF		$1.43B	77.34	-1.90%	―	―	―
VET		$1.11B	―	-1.19%	4.97%	―	―
BIREF		$1.37B	13.99	6.10%	4.75%	―	―
CDDRF		$1.14B	7.85	29.87%	6.28%	―	―
FRHLF		$1.49B	12.75	15.22%	8.59%	―	―

* Energy Sector Average

Performance Comparison

TSE:BTE

Baytex Energy

2.50

-2.12

-45.84%

AAVVF

Advantage Energy

8.49

0.09

1.07%

VET

Vermilion Energy

7.31

-3.80

-34.20%

BIREF

Birchcliff Energy

5.13

0.75

17.12%

CDDRF

Headwater Exploration

4.91

-0.07

-1.41%

FRHLF

Freehold Royalties

9.14

-0.23

-2.45%

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.