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Baytex Energy (TSE:BTE)
TSX:BTE
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Baytex Energy
(TSX:BTE)
Rating:74Outperform
Price Target:
C$3.00
▲(10.70%Upside)
Positive Factors
Earnings
The company reported a Q1 beat and increased its dividend by 3%.
Exploration Potential
Baytex continues to shine in the Clearwater play, which is one of the top areas for energy production in Canada.
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
Market Environment
High leverage in a highly volatile environment has led to a reduction in the target price for Baytex.
Payout Concerns
The issue at hand is the company's Eagle Ford wells, which take 2-3 years before payout at current WTI prices.
Stock Downgrade
There is a downgrade to SELL based on Q1 results as pre-released.
Baytex Energy (BTE) vs. iShares MSCI Canada ETF (EWC)
Market Cap
$1.90B
Dividend Yield3.64%
Average Volume (3M)6.28M
Price to Earnings (P/E)6.2
Beta (1Y)1.60
Revenue Growth10.55%
EPS GrowthN/A
CountryCA
Employees370
SectorEnergy
Sector Strength53
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)0.09
Shares Outstanding768,600,000
10 Day Avg. Volume5,385,946
30 Day Avg. Volume6,276,780
Financial Highlights & Ratios
PEG Ratio0.11
Price to Book (P/B)0.81
Price to Sales (P/S)0.00
P/FCF Ratio12.89
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$3.86Price Target Upside42.29% 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: 28.92%|
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
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.75
Positive
Balance Sheet
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.70
Positive
Cash Flow
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.80
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
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 |
| EBITDA | 2.05B | 2.00B | 723.50M | 1.58B | 2.27B | -1.99B |
| Net Income | 320.23M | 236.60M | -233.36M | 855.61M | 1.61B | -2.44B |
Balance Sheet | ||||||
| Total Assets | 5.91B | 7.76B | 7.46B | 5.10B | 4.83B | 3.41B |
| Cash, Cash Equivalents and Short-Term Investments | 5.57M | 16.61M | 55.81M | 5.46M | -7.76M | -11.08M |
| Total Debt | 1.85B | 2.28B | 2.44B | 937.17M | 1.39B | 1.79B |
| 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
Positive
2.71
Price Trends
2.43
Positive
2.65
Positive
3.24
Negative
Market Momentum
0.02
Positive
57.67
Neutral
41.50
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 2.71 is above the 20-day moving average (MA) of 2.65, above the 50-day MA of 2.43, and below the 200-day MA of 3.24, indicating a neutral trend. The MACD of 0.02 indicates Positive momentum. The RSI at 57.67 is Neutral, neither overbought nor oversold. The STOCH value of 41.50 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 (68)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $1.90B | 6.16 | 8.02% | 3.64% | 10.55% | ― | |
68 Neutral | $14.94B | 9.81 | 6.34% | 5.24% | 4.13% | -66.99% | |
| $1.39B | 77.34 | -1.90% | ― | ― | ― | ||
| $1.14B | ― | -1.19% | 4.90% | ― | ― | ||
| $1.37B | 14.04 | 6.10% | 1.70% | ― | ― | ||
| $1.19B | 8.22 | 29.87% | 6.39% | ― | ― | ||
| $1.53B | 13.16 | 15.22% | 8.43% | ― | ― |
* Energy Sector Average
Performance Comparison
TSE:BTE
Baytex Energy
2.63
-2.18
-45.27%
AAVVF
Advantage Energy
8.37
1.02
13.88%
VET
Vermilion Energy
7.66
-2.69
-25.99%
BIREF
Birchcliff Energy
5.04
0.80
18.87%
CDDRF
Headwater Exploration
5.02
-0.02
-0.40%
FRHLF
Freehold Royalties
9.42
0.12
1.29%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.