Peyto Exploration & Dev (PEY) AI Stock Analysis

• Market Cap: C$5.88B
• Dividend Yield: 5.77%
• Average Volume (3M): 967.15K
• Price to Earnings (P/E): 10.9
• Beta (1Y): 0.65
• Revenue Growth: 11.52%
• EPS Growth: 24.76%
• Country: CA
• Employees: 53
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Exploration & Production
• EPS (TTM): 0.61
• Shares Outstanding: 204,738,250
• 10 Day Avg. Volume: 974,472
• 30 Day Avg. Volume: 967,154
• PEG Ratio: 0.24
• Price to Book (P/B): 1.60
• Price to Sales (P/S): 4.32
• P/FCF Ratio: 11.87
• 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$28.33
• Price Target Upside: -1.36% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): 2.24
• Revenue Forecast (FY): C$1.48B

• Rating: 78 Outperform
• Price Target: C$32.00 ▲(11.42% Upside)
• Action: Reiterated Date: 03/12/26
• Date: Action: Reiterated 03/12/26

Score is driven primarily by strong recent financial performance (profitability and cash generation with improving leverage), supported by an established technical uptrend and attractive valuation (low P/E and solid dividend). The key offsets are commodity-cycle volatility, moderate free-cash-flow conversion, and earnings-call risks tied to low AECO prices and elevated government-related costs.

Positive Factors

Strong cash generation

Robust 2025 operating cash flow and a sizable free cash flow outturn provide durable funding for capex, dividends and debt reduction. With OCF covering earnings ~2.3x, the company has recurring internal liquidity to support growth plans and manage cyclicality without overreliance on external financing.

Improving balance sheet

Measured deleveraging and rising equity in 2025 improved financial flexibility and reduced balance-sheet risk. Higher returns on equity (~14.7%) indicate capital is being deployed effectively, giving the company more headroom for disciplined investment and resilience through downturns while still servicing a sizable but reduced debt load.

Effective hedging policy

A demonstrably successful hedging program materially boosted realized pricing and stabilized cash flows during weak AECO pricing. By locking-in margins and reducing short-term price exposure, the policy supports predictable funds from operations, underwriting capex plans and dividend payouts across lower-price periods.

Negative Factors

Commodity cyclicality

Upstream gas exposure means earnings and cash flows remain highly sensitive to commodity price cycles. Historical swings including a 2020 loss and multi-year revenue volatility limit visibility on sustained profitability and force conservative capital planning, increasing execution risk for multi-year growth targets.

High government-related costs

A structural burden of regulatory fees, carbon and other government charges consuming ~30% of operating costs materially reduces netbacks. This lowers margin resilience in low-price periods and makes returns more sensitive to regulatory changes or tax increases, constraining long-term free cash flow potential.

Moderate FCF conversion

Despite healthy nominal free cash flow, conversion of net income into free cash flow remains under 50%, indicating significant reinvestment and working-capital/capex demands. Persistently modest conversion limits excess distributable cash, slows debt paydown potential and reduces financial cushion through commodity downturns.

Peyto Exploration & Dev Business Overview & Revenue Model

Company Description

Peyto Exploration & Development Corp. engages in the exploration, development, and production of oil and natural gas, and natural gas liquids in Deep Basin of Alberta. As of December 31, 2021, it had a total proved plus probable reserves of 904 million barrels of oil equivalent. The company was formerly known as Peyto Energy Trust and changed its name to Peyto Exploration & Development Corp. in January 2011. Peyto Exploration & Development Corp. was founded in 1998 and is headquartered in Calgary, Canada.

How the Company Makes Money

Peyto makes money primarily by producing hydrocarbons and selling them into energy markets. Its core revenue stream is the sale of natural gas, with additional revenue from natural gas liquids (such as condensate and other NGL components) recovered from its production stream. Revenue is therefore driven by (1) production volumes from its wells, (2) realized commodity prices for natural gas and NGLs, and (3) the quality and mix of products it sells. The company’s earnings are also influenced by its ability to control operating and transportation costs and by its access to processing and transportation infrastructure; owning and operating parts of this infrastructure can support netbacks by reducing reliance on third-party services and improving market access. Like many Canadian producers, Peyto may use commodity price risk management (e.g., hedging) to help stabilize cash flows, which can affect realized pricing and reported revenue in a given period. Significant external factors contributing to earnings include regional natural gas benchmark pricing, basis differentials, seasonal demand, pipeline and processing constraints, and regulatory/royalty frameworks in Alberta.

Peyto Exploration & Dev Financial Statement Overview

Summary

Strong 2025 profitability (high net margin) and solid operating cash flow with improving leverage, but results are cyclical/volatile across years and free-cash-flow conversion is only moderate versus net income.

Income Statement

Profitability is strong and improved meaningfully in 2025: revenue rose to ~C$1.06B (up sharply vs. 2024) and net income increased to ~C$419M, with a high net margin (~40%). However, results have been volatile across the cycle (including a loss in 2020 and large revenue swings in 2021–2023), and 2025 gross margin fell versus 2024, signaling some cost/price pressure even as earnings remained strong.

Balance Sheet

Leverage looks reasonable for the sector and has improved recently: debt-to-equity declined from ~0.50 in 2024 to ~0.41 in 2025, while equity increased. Returns on equity improved to ~14.7% in 2025 from ~10–11% in 2023–2024, indicating better profitability on the capital base. The key drawback is still balance-sheet exposure to a cyclical commodity business, with debt remaining sizable (~C$1.18B) even after the improvement.

Cash Flow

Cash generation is healthy: 2025 operating cash flow was strong (~C$857M) and free cash flow rose to ~C$384M, with operating cash flow comfortably covering earnings (about 2.3x). The main weakness is conversion of earnings into free cash flow: free cash flow was under half of net income in 2025 (and similarly modest in prior years), implying meaningful reinvestment and/or working-capital/capex demands; free cash flow also declined in 2023–2024 before rebounding in 2025.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.06B	908.25M	945.51M	1.63B	911.98M
Gross Profit	395.02M	421.22M	424.58M	1.07B	575.60M
EBITDA	746.56M	849.88M	778.10M	872.94M	517.66M
Net Income	418.59M	280.57M	292.63M	390.66M	152.25M
Balance Sheet
Total Assets	5.46B	5.51B	5.51B	4.01B	3.78B
Cash, Cash Equivalents and Short-Term Investments	51.06M	13.63M	37.18M	11.90M	5.72M
Total Debt	1.18B	1.36B	1.40B	864.52M	1.07B
Total Liabilities	2.61B	2.81B	2.79B	1.95B	2.02B
Stockholders Equity	2.85B	2.70B	2.71B	2.06B	1.77B
Cash Flow
Free Cash Flow	384.13M	215.49M	233.84M	304.92M	92.82M
Operating Cash Flow	857.48M	672.36M	644.87M	811.78M	457.87M
Investing Cash Flow	-452.45M	-432.24M	-1.15B	-516.91M	-351.43M
Financing Cash Flow	-367.60M	-263.66M	527.27M	-288.68M	-110.03M

Peyto Exploration & Dev Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 28.72
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:PEY, the sentiment is Positive. The current price of 28.72 is above the 20-day moving average (MA) of 26.87, above the 50-day MA of 24.97, and above the 200-day MA of 20.80, indicating a bullish trend. The MACD of 0.98 indicates Negative momentum. The RSI at 71.60 is Negative, neither overbought nor oversold. The STOCH value of 87.65 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:PEY.

Peyto Exploration & Dev Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ATH	80 Outperform	$4.37B	14.32	27.19%	―	3.04%	115.77%
PEY	78 Outperform	C$5.88B	10.89	13.75%	5.77%	11.52%	24.76%
POU	73 Outperform	$4.25B	2.70	48.07%	2.84%	-32.36%	282.99%
TVE	68 Neutral	C$5.16B	-110.02	-4.70%	1.91%	-1.36%	-149.45%
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%
BTE	65 Neutral	C$4.11B	-1.00	-16.22%	2.07%	-8.89%	―

Peyto Exploration & Dev Corporate Events

Peyto Boosts Reserves, Cuts Debt and Sets $450–$500 Million 2026 Capital Plan

Peyto reported strong 2025 reserves additions, adding 504 BCFe of new proved developed producing reserves at its lowest finding, development and acquisition cost in 23 years, while growing reserves across all categories and achieving record December production of 145,000 boe/d. The company invested $475 million in capital, funded just over half from funds from operations while returning $265 million in dividends and reducing net debt by $170 million, and its low-cost structure and hedging delivered robust netbacks and recycle ratios, supporting a before-tax net present value of up to $9.4 billion on a proved plus probable basis.

The board approved a 2026 capital budget of $450–$500 million, aimed at drilling 70–80 net horizontal wells and optimizing existing infrastructure to add up to 48,000 boe/d of new production and more than offset natural declines. With hedges securing over $4.00/Mcf for roughly 475 MMcf/d of gas and additional liquids hedges, Peyto expects more than $830 million of revenue in 2026, providing coverage for capital spending and dividends while enabling continued debt reduction and reinforcing its competitive position in the Canadian gas sector.

The most recent analyst rating on (TSE:PEY) stock is a Hold with a C$24.00 price target. To see the full list of analyst forecasts on Peyto Exploration & Dev stock, see the TSE:PEY Stock Forecast page.

Peyto Confirms March Payout for February Monthly Dividend

Peyto Exploration & Development Corp. has confirmed it will pay a monthly dividend of $0.11 per common share for February 2026, with the payout scheduled for March 13, 2026, to shareholders of record as of February 28. The company noted that these dividends qualify as eligible dividends for Canadian tax purposes, reinforcing its commitment to ongoing shareholder returns while directing investors to its website for detailed monthly reports on capital spending and production trends.

By maintaining a consistent dividend policy alongside regular disclosure of operating metrics, Peyto underscores its strategy of balancing income for shareholders with continued investment in its resource base and growth initiatives. This approach may appeal to income-focused investors in the energy sector who are looking for both predictable cash flows and visibility into how management allocates capital in a volatile commodity price environment.

The most recent analyst rating on (TSE:PEY) stock is a Hold with a C$24.00 price target. To see the full list of analyst forecasts on Peyto Exploration & Dev stock, see the TSE:PEY Stock Forecast page.

Peyto Confirms $0.11 Monthly Dividend for January 2026

Peyto Exploration & Development Corp. has confirmed a monthly dividend of $0.11 per common share for January 2026, payable on February 13, 2026, to shareholders of record as of January 31, 2026. The dividend, designated as an eligible dividend for Canadian tax purposes, underscores Peyto’s ongoing commitment to returning capital to shareholders while maintaining transparency through its monthly online reporting of spending and production trends, reinforcing its appeal to income-focused investors in the energy sector.

The most recent analyst rating on (TSE:PEY) stock is a Buy with a C$25.00 price target. To see the full list of analyst forecasts on Peyto Exploration & Dev stock, see the TSE:PEY Stock Forecast page.

Peyto Extends Debt Maturities With New $100 Million Senior Notes

Peyto Exploration & Development Corp. has refinanced its debt by issuing $100 million in senior secured notes at a 5.03% coupon, maturing in 2033, through a private placement that ranks pari passu with its existing credit facilities and note agreements. The proceeds were used to fully repay $100 million of notes that matured on January 3, 2026, effectively extending the company’s debt maturity profile and supporting balance-sheet stability without increasing net debt, which may enhance financial flexibility and investor confidence in its long-term funding strategy.

The most recent analyst rating on (TSE:PEY) stock is a Buy with a C$27.00 price target. To see the full list of analyst forecasts on Peyto Exploration & Dev stock, see the TSE:PEY Stock Forecast page.

Peyto Exploration & Development Confirms December Dividend

Peyto Exploration & Development Corp. announced a monthly dividend of $0.11 per common share for December 2025, payable on January 15, 2026. This announcement reinforces Peyto’s commitment to providing returns to its shareholders and highlights its stable financial position within the energy sector.

The most recent analyst rating on (TSE:PEY) stock is a Buy with a C$27.00 price target. To see the full list of analyst forecasts on Peyto Exploration & Dev stock, see the TSE:PEY Stock Forecast page.