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Parex Resources (TSE:PXT)
TSX:PXT
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Parex Resources (PXT) AI Stock Analysis

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TSE:PXT

Parex Resources

(TSX:PXT)

Rating:77Outperform
Price Target:
C$18.50
▲(8.12% Upside)
Parex Resources' strong valuation and positive earnings call sentiment are the most significant factors driving its score. The company's robust financial performance and bullish technical indicators further support its attractiveness, despite concerns over revenue and cash flow growth.
Positive Factors
Earnings Guidance
With Q4 earnings, the company reaffirmed 2025 guidance, allowing investors to move forward with confidence.
Valuation
Current valuation appears quite attractive and should bring in new investors as the company reiterates consistent results.
Negative Factors
Geopolitical Risks
Colombia hasn't been kind to Canadian-listed E&P names. Government regulation, drilling exploration risk, and social unrest have historically warranted caution.
Production Results
Underwhelming production results this past summer had upended multiple successful years for Parex.

Parex Resources (PXT) vs. iShares MSCI Canada ETF (EWC)

Parex Resources Business Overview & Revenue Model

Company DescriptionParex Resources Inc. (PXT) is a Canadian-based oil and gas exploration and production company focused primarily on the development of its assets in Colombia. The company operates in the exploration and production sector, with a strong emphasis on maximizing the potential of its oil reserves. Parex is known for its efficient operations and commitment to sustainable practices, targeting both conventional and unconventional oil resources. Its core products include crude oil and natural gas, which are sold to various markets, enhancing energy supply and contributing to local economies.
How the Company Makes MoneyParex Resources generates revenue primarily through the production and sale of crude oil and natural gas. The company earns income by extracting hydrocarbons from its exploration sites, particularly in Colombia, where it holds multiple production blocks. Key revenue streams include the sale of crude oil at market prices, which can fluctuate based on global oil demand and pricing. Additionally, Parex often engages in strategic partnerships and joint ventures that allow it to share operational costs and risks, thereby enhancing profitability. The company also focuses on cost-effective production techniques and operational efficiency, which contribute positively to its margins. Factors such as geopolitical stability in Colombia, commodity price trends, and effective management of resources play significant roles in influencing its overall earnings.

Parex Resources Earnings Call Summary

Earnings Call Date:Jul 30, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Nov 05, 2025
Earnings Call Sentiment Positive
The earnings call reflects a generally positive sentiment with strong financial results, efficient operational execution, and strategic exploration plans. Despite facing some challenges like commodity price volatility and a higher tax rate, the company's outlook remains optimistic with continued production growth and cost management.
Q2-2025 Updates
Positive Updates
Strong Financial Performance
Netback performance was supported by favorable Colombian crude oil differentials and lower production costs. Funds flow provided by operations was $105 million, and FFO netback was $26.90 per BOE.
Efficient Operational Execution
Achieved several key milestones, including a 6-well infill drilling program with time and cost improvements, and encouraging results from near-field exploration with 3 wells producing approximately 2,500 BOE per day.
Production Growth on Track
Production averaged 42,542 BOE per day with expectations of reaching 44,000 to 47,000 BOE per day by year's end, setting up favorably for 2026.
Successful Cost Management
Realized meaningful internal efficiency gains, including lower power costs and optimized operations, contributing to improved netbacks.
Strategic Investment in Exploration
Advancing the Llanos Foothills exploration plans for 2026, and planning to spud 1 to 2 exploration wells in the Foothills next year.
Negative Updates
Commodity Price Volatility
The company hedged roughly 50% of planned production due to recent global volatility, indicating some uncertainty in future cash flow profiles.
Higher Effective Tax Rate
Current taxes were $9 million for the quarter, with a full-year effective current tax rate expected to be between 5% to 10%, slightly higher than previous forecasts.
Company Guidance
During the Parex Resources Q2 2025 conference call, the company provided guidance on various operational and financial metrics, projecting steady production growth in the second half of the year. They anticipate achieving their annual production guidance of 44,000 to 47,000 barrels of oil equivalent per day, supported by a robust netback of $26.90 per BOE, despite an average Brent oil price of $67 per barrel. The company highlighted key advancements, including the completion of a 6-well drilling program at LLA-34 and a 5-well campaign at LLA-32, contributing to an average production of 42,542 BOE per day for Q2. Favorable oil pricing differentials, with Vasconia benchmark differentials improving to less than $2 per barrel, and lower production costs have bolstered netbacks. The balance sheet remains strong, with $105 million in funds flow provided by operations and capital expenditures of $89 million for the quarter. Looking ahead, Parex plans to maintain a similar level of capital spending in Q3 while executing on share buybacks and sustaining a robust dividend, aiming for a strong production exit rate to set a favorable trajectory into 2026.

Parex Resources Financial Statement Overview

Summary
Parex Resources shows strong profitability margins and a robust balance sheet with low leverage. However, the decline in revenue and free cash flow growth rates are concerns that need addressing for sustained growth.
Income Statement
65
Positive
Parex Resources has shown a mixed performance in its income statement. The TTM (Trailing-Twelve-Months) data indicates a decline in revenue growth rate by 5.8%, which is a concern. However, the company maintains a healthy gross profit margin of 45.8% and a net profit margin of 12.1%. The EBIT and EBITDA margins are also strong at 18.0% and 37.6% respectively, indicating operational efficiency despite the revenue decline.
Balance Sheet
78
Positive
The balance sheet of Parex Resources is robust with a very low debt-to-equity ratio of 0.012, suggesting minimal leverage risk. The return on equity (ROE) is moderate at 6.7%, reflecting decent profitability relative to shareholder equity. The equity ratio stands at a solid level, indicating a strong capital structure with a high proportion of equity financing.
Cash Flow
60
Neutral
The cash flow statement reveals some challenges, with a negative free cash flow growth rate of 19.65% in the TTM period. However, the operating cash flow to net income ratio is strong at 2.19, indicating good cash generation relative to net income. The free cash flow to net income ratio is 56.7%, which is satisfactory but shows room for improvement in cash flow management.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.05B1.29B1.17B1.31B900.20M531.87M
Gross Profit480.05M549.07M889.83M1.11B728.57M357.20M
EBITDA394.11M529.40M649.37M957.67M625.22M290.71M
Net Income126.48M60.68M459.31M611.37M303.11M99.32M
Balance Sheet
Total Assets2.22B2.16B2.42B2.31B1.78B1.54B
Cash, Cash Equivalents and Short-Term Investments98.83M98.02M140.35M419.00M378.34M330.56M
Total Debt22.53M64.62M95.74M6.08M4.51M1.82M
Total Liabilities326.94M323.74M459.90M599.38M390.53M200.60M
Stockholders Equity1.90B1.83B1.96B1.71B1.39B1.34B
Cash Flow
Free Cash Flow271.96M343.89M26.11M453.36M322.15M173.10M
Operating Cash Flow479.98M569.91M376.47M983.60M534.30M290.02M
Investing Cash Flow-315.80M-392.24M-535.51M-638.10M-229.04M-179.80M
Financing Cash Flow-190.72M-214.90M-130.63M-291.98M-252.35M-168.44M

Parex Resources Technical Analysis

Technical Analysis Sentiment
Positive
Last Price17.11
Price Trends
50DMA
15.33
Positive
100DMA
13.82
Positive
200DMA
13.58
Positive
Market Momentum
MACD
0.54
Negative
RSI
64.48
Neutral
STOCH
85.17
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:PXT, the sentiment is Positive. The current price of 17.11 is above the 20-day moving average (MA) of 16.40, above the 50-day MA of 15.33, and above the 200-day MA of 13.58, indicating a bullish trend. The MACD of 0.54 indicates Negative momentum. The RSI at 64.48 is Neutral, neither overbought nor oversold. The STOCH value of 85.17 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:PXT.

Parex Resources Peers Comparison

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
77
Outperform
$1.67B9.636.62%8.93%-20.60%-56.33%
65
Neutral
$15.47B7.303.02%5.25%4.27%-62.52%
$1.16B4.40%4.67%
$1.14B8.5925.93%6.03%
$872.48M-26.19%7.34%
$998.46M18.626.73%
80
Outperform
C$1.20B13.489.64%9.99%-9.20%-25.28%
* Energy Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:PXT
Parex Resources
17.11
5.34
45.39%
VET
Vermilion Energy
7.68
-2.20
-22.27%
CDDRF
Headwater Exploration
4.89
0.02
0.41%
AOIFF
Africa Oil
1.30
-0.08
-5.80%
KELTF
Kelt Exploration
4.96
0.24
5.08%
TSE:CJ
Cardinal Energy
7.43
1.10
17.38%

Parex Resources Corporate Events

DividendsBusiness Operations and StrategyFinancial Disclosures
Parex Resources Reports Strong Q2 2025 Results and Declares Q3 Dividend
Positive
Jul 30, 2025

Parex Resources reported strong financial results for Q2 2025, driven by favorable crude differentials and operational efficiency, with a funds flow of $105 million. The company declared a Q3 2025 dividend of C$0.385 per share and highlighted successful exploration in the Southern Llanos, expecting increased production by year-end.

The most recent analyst rating on (TSE:PXT) stock is a Hold with a C$15.00 price target. To see the full list of analyst forecasts on Parex Resources stock, see the TSE:PXT Stock Forecast page.

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.Date of analysis: Aug 11, 2025