MEG Energy (MEG) AI Stock Analysis

• Market Cap: $6.82B
• Dividend Yield: 1.49%
• Average Volume (3M): 708.68K
• Price to Earnings (P/E): 12.7
• Beta (1Y): 1.31
• Revenue Growth: -22.92%
• EPS Growth: 0.54%
• Country: CA
• Employees: 473
• Sector: Energy
• Sector Strength: 46
• Industry: Oil & Gas Exploration & Production
• EPS (TTM): 0.26
• Shares Outstanding: 254,378,040
• 10 Day Avg. Volume: 702,599
• 30 Day Avg. Volume: 708,682
• PEG Ratio: -2.29
• Price to Book (P/B): 1.40
• Price to Sales (P/S): 1.11
• P/FCF Ratio: 8.05
• Enterprise Value/Market Cap: 1.09
• Enterprise Value/Revenue: 1.54
• Enterprise Value/Gross Profit: 3.95
• Enterprise Value/Ebitda: 5.91
• 1Y Price Target: $28.00
• Price Target Upside: 2.99% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 6

• Rating: 79 Outperform
• Price Target: C$31.00 ▲(14.01% Upside)

MEG Energy's strong earnings call performance and technical indicators are the primary drivers of its score. The company has demonstrated resilience and strategic growth despite external challenges. Financial performance is solid, though revenue and cash flow growth need attention. Valuation metrics are favorable, supporting the stock's attractiveness.

Positive Factors

Free Cash Flow

MEG Energy generated $168 million of free cash flow, returning all of it to shareholders through its base dividend and share repurchases.

Production

The July bounceback showed solid execution with production at 109 mbpd.

Shareholder Returns

Execution on return of capital continues with 6.7 million shares repurchased, representing approximately 3% of the float.

Negative Factors

Operating Costs

Higher-than-expected operating costs were offset by stronger bitumen realizations.

Production Disruption

The heavy turnaround at Christina Lake, plus the wildfire-related shut-in, brought 2Q production down materially as expected.

MEG Energy Business Overview & Revenue Model

Company Description

MEG Energy Corp. is a Canadian oil sands company headquartered in Calgary, Alberta. The company focuses on the development and production of heavy oil through its innovative SAGD (Steam Assisted Gravity Drainage) technology, primarily in the Athabasca oil sands region of Alberta. MEG is committed to sustainable practices and employs advanced techniques to enhance oil recovery while minimizing environmental impact. Its core products include crude oil and natural gas liquids, which are sold to various markets.

How the Company Makes Money

MEG Energy generates revenue primarily through the production and sale of crude oil from its oil sands operations. The company utilizes its proprietary SAGD technology to extract heavy oil, which is then processed and sold to refiners and other customers. Key revenue streams include the sale of blended crude oil, which is typically sold at prices linked to benchmark crude indices, and natural gas liquids. Additionally, MEG's financial performance can be influenced by oil prices, production volumes, and operating costs. The company may also benefit from partnerships with other energy firms for technology sharing and operational efficiencies, as well as transportation agreements that facilitate the movement of its products to market.

MEG Energy Financial Statement Overview

Summary

MEG Energy displays strong financial performance with a robust cash flow position and effective cost management. The company shows good profitability margins and maintains financial stability with low leverage.

Income Statement

MEG Energy's TTM (Trailing-Twelve-Months) income statement shows a strong gross profit margin of 29.31% and a healthy net profit margin of 11.57%. The company has demonstrated resilience with its EBIT margin at 18.07% and an EBITDA margin of 27.73%. Despite a slight decline in total revenue, the company maintains robust profitability metrics, indicating effective cost management.

Balance Sheet

The balance sheet reflects a solid equity structure with a debt-to-equity ratio of 0.24, indicating low leverage and financial stability. The return on equity for the TTM is 13.50%, which suggests decent profitability relative to shareholder equity. An equity ratio of 68.04% further emphasizes the firm's stable financial position.

Cash Flow

MEG Energy's cash flow statement reveals a strong operating cash flow to net income ratio of 2.13, underscoring robust cash generation relative to earnings. The free cash flow to net income ratio is 1.17, indicating efficient capital use. Although free cash flow decreased slightly compared to the previous year, the overall cash flow position remains strong.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.81B	5.74B	6.11B	6.34B	4.40B	2.30B
Gross Profit	1.88B	1.89B	1.97B	2.63B	1.67B	61.00M
EBITDA	1.25B	1.40B	1.46B	1.89B	1.07B	210.00M
Net Income	551.00M	507.00M	569.00M	902.00M	283.00M	-357.00M
Balance Sheet
Total Assets	6.78B	6.74B	6.90B	7.03B	7.59B	7.22B
Cash, Cash Equivalents and Short-Term Investments	195.00M	156.00M	160.00M	192.00M	361.00M	114.00M
Total Debt	1.05B	1.10B	1.38B	1.82B	3.03B	3.20B
Total Liabilities	2.16B	2.19B	2.37B	2.65B	3.79B	3.72B
Stockholders Equity	4.62B	4.55B	4.53B	4.38B	3.81B	3.51B
Cash Flow
Free Cash Flow	711.00M	792.00M	900.00M	1.51B	359.00M	153.00M
Operating Cash Flow	1.38B	1.34B	1.35B	1.89B	690.00M	302.00M
Investing Cash Flow	-614.00M	-501.00M	-478.00M	-354.00M	-281.00M	-189.00M
Financing Cash Flow	-657.00M	-860.00M	-896.00M	-1.73B	-165.00M	-216.00M

MEG Energy Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 27.19
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:MEG, the sentiment is Positive. The current price of 27.19 is above the 20-day moving average (MA) of 26.75, above the 50-day MA of 26.29, and above the 200-day MA of 24.02, indicating a bullish trend. The MACD of 0.13 indicates Positive momentum. The RSI at 60.07 is Neutral, neither overbought nor oversold. The STOCH value of 77.66 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:MEG.

MEG Energy Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MEG	79 Outperform	$6.82B	12.66	11.70%	1.49%	-22.92%	0.54%
WCP	79 Outperform	$12.39B	6.87	11.56%	7.30%	12.28%	16.78%
SCR	77 Outperform	C$7.89B	11.08	10.85%	2.77%	20.21%	7.08%
PEY	70 Outperform	C$3.84B	11.45	12.21%	6.95%	7.02%	7.16%
Sector *	65 Neutral	$14.85B	7.05	2.76%	5.52%	4.66%	-61.61%
PSK	65 Neutral	$5.56B	25.39	8.08%	4.29%	-4.07%	-3.22%

MEG Energy Corporate Events

MEG Energy Reports Strong Q2 2025 Results and Increases Dividend

MEG Energy Corp. reported its second-quarter 2025 results, highlighting the successful completion of its largest planned turnaround amidst challenging wildfire conditions. The company also announced a 10% increase in its quarterly dividend to $0.11 per share, reflecting confidence in its strategic direction and commitment to shareholder returns. Key achievements include excellent safety performance, a safe wildfire response, and significant progress on the Facility Expansion Project, which remains on track for completion in 2027. Financially, MEG generated adjusted funds flow of $125 million and maintained production levels despite delays, with capital expenditures on plan and shareholder returns through share repurchases and dividends.

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

MEG Energy to Release Q2 2025 Results and Host Conference Call

MEG Energy has announced its second quarter results for 2025, which will be released on July 31, 2025, after market close. The company will hold a conference call on August 1, 2025, to discuss these results. This announcement is significant for stakeholders as it provides insights into the company’s operational performance and strategic positioning in the energy market.

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

MEG Energy Board Recommends Rejection of Strathcona’s Offer

MEG Energy’s Board of Directors has advised shareholders to reject Strathcona Resources Ltd.’s unsolicited offer to acquire MEG shares, deeming it inadequate and not in the best interest of shareholders. The board highlights that the offer exposes shareholders to inferior assets and potential market risks due to Waterous Energy Fund’s significant ownership, which could lead to downward pressure on share prices. MEG Energy emphasizes its strong financial position and growth potential, supported by its robust asset portfolio and strategic investments, as reasons for pursuing a standalone strategy or seeking superior offers.

The most recent analyst rating on (TSE:MEG) stock is a Hold with a C$25.00 price target. To see the full list of analyst forecasts on MEG Energy stock, see the TSE:MEG Stock Forecast page.

MEG Energy Resumes Operations at Christina Lake Post-Wildfire

MEG Energy has announced the resumption of operations at its Christina Lake Regional Project following disruptions caused by regional wildfires. The company has successfully restored its connection to Alberta’s electric grid and restarted Phase 2B operations after a turnaround, highlighting the support received from emergency responders and the dedication of its employees and contractors. This development marks a significant step in stabilizing MEG’s operations and ensuring continued energy supply, reinforcing its position in the energy sector.

The most recent analyst rating on (TSE:MEG) stock is a Hold with a C$25.00 price target. To see the full list of analyst forecasts on MEG Energy stock, see the TSE:MEG Stock Forecast page.

MEG Energy Evacuates Staff and Manages Production Amid Wildfires

MEG Energy has safely evacuated non-essential personnel from its Christina Lake Regional Project due to nearby wildfires, while maintaining critical staff on site. The wildfires have caused a power outage affecting the startup of the company’s Phase 2B operations, delaying approximately 70,000 barrels per day of production. MEG is leveraging its cogeneration capabilities to continue production and is working with stakeholders to restore full capacity.

The most recent analyst rating on (TSE:MEG) stock is a Hold with a C$25.00 price target. To see the full list of analyst forecasts on MEG Energy stock, see the TSE:MEG Stock Forecast page.

MEG Energy Advises Shareholders Against Immediate Action on Strathcona’s Takeover Bid

MEG Energy has advised its shareholders to refrain from taking any action regarding an unsolicited takeover bid by Strathcona Resources. The company’s Board of Directors, supported by financial and legal advisors, is evaluating the offer and will provide a recommendation within 15 days. MEG remains committed to its long-term strategy and has terminated its automatic share purchase plan due to the takeover bid.

The most recent analyst rating on (TSE:MEG) stock is a Hold with a C$25.00 price target. To see the full list of analyst forecasts on MEG Energy stock, see the TSE:MEG Stock Forecast page.

MEG Energy Responds to Unsolicited Acquisition Proposal by Strathcona Resources

MEG Energy has acknowledged Strathcona Resources Ltd.’s announcement of an intention to make an unsolicited offer to acquire all outstanding common shares of MEG. The MEG Board of Directors is set to evaluate the offer once received and advises shareholders to refrain from taking any action until a formal review and recommendation are made. MEG has appointed BMO Capital Markets as its financial advisor and Burnet, Duckworth & Palmer LLP as its legal advisor.

The most recent analyst rating on (TSE:MEG) stock is a Hold with a C$25.00 price target. To see the full list of analyst forecasts on MEG Energy stock, see the TSE:MEG Stock Forecast page.