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Parex Resources
(TSX:PXT)
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Rating:74Outperform
Price Target:
C$27.00
▲(14.46% Upside)
Action:Reiterated
Date:08/03/26
The score is driven primarily by strong financial performance with positive free cash flow but elevated cyclicality risks from increased leverage and weaker cash conversion. Valuation is a major positive (very low P/E and high dividend yield). The latest earnings call adds support via higher production and cash flow guidance, while technicals are moderately positive with price above key moving averages but limited by missing momentum indicators.
Positive Factors
Strong free cash flow generation
Consistent positive free cash flow (~$190M TTM) and robust operating cash generation provide durable internal funding for the $250M capital program, reinvestment, debt paydown and shareholder returns, reducing reliance on external financing over the next 2–6 months.
Negative Factors
Higher leverage vs historical levels
A meaningful increase in leverage (debt ~35% of equity) reduces financial flexibility and heightens sensitivity to commodity price downturns; higher interest and refinancing needs could constrain capital allocation and shareholder returns if cash flows weaken.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong free cash flow generation
Consistent positive free cash flow (~$190M TTM) and robust operating cash generation provide durable internal funding for the $250M capital program, reinvestment, debt paydown and shareholder returns, reducing reliance on external financing over the next 2–6 months.
Read all positive factors
Parex Resources (PXT) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$2.55B
Dividend Yield5.8%
Average Volume (3M)556.51K
Price to Earnings (P/E)3.3
Beta (1Y)0.16
Revenue Growth13.63%
EPS Growth361.28%
CountryCA
Employees461
SectorEnergy
Sector Strength52
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)5.86
Shares Outstanding96,180,250
10 Day Avg. Volume644,367
30 Day Avg. Volume556,510
Financial Highlights & Ratios
PEG Ratio0.01
Price to Book (P/B)0.67
Price to Sales (P/S)1.46
P/FCF Ratio5.72
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$31.67Price Target Upside34.24% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)6.27
Revenue Forecast (FY)C$1.61B
Parex Resources Business Overview & Revenue Model
Company Description
Parex Resources Inc. is an energy firm primarily focused on the exploration, development, and extraction of crude oil and natural gas within Colombia. The company holds significant onshore exploration and production blocks, encompassing approximat...
How the Company Makes Money
Parex makes money primarily by producing and selling hydrocarbons—mainly crude oil—from its Colombian upstream oil and gas assets. Revenue is generated when production volumes are sold into domestic and/or export markets at prices linked to releva...
Parex Resources Earnings Call Summary
Earnings Call Date:Jul 31, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 10, 2026
Earnings Call Sentiment Positive
Overall the call presents a strongly positive strategic transformation driven by major closed transactions (Frontera and Magdalena), a large pro forma reserves uplift (>80%), materially higher production guidance and clear cash flow guidance for H2 2026. These positives are tempered by near-term headwinds including $59M of transaction/hedging impacts, rising operating costs due to El Niño and peso appreciation, widened Vasconia differentials, and seasonal production constraints that management is addressing through integration, cost synergies and infrastructure plans.Positive Updates
Substantially Increased Production Guidance
Company nearly doubled its production guidance to roughly 86,000 barrels per day at the midpoint (approximately a ~100% increase versus prior guidance), reflecting the impact of recent transactions.
Negative Updates
One-Time Transaction Fees and Hedging Losses Impacting Reported Results
Second-quarter reported results were affected by $59 million of one-time transaction fees plus realized hedging losses; management adjusted results excluding these items to present underlying performance.
Read all updates
Q2-2026 Updates
Positive
Negative
Substantially Increased Production Guidance
Company nearly doubled its production guidance to roughly 86,000 barrels per day at the midpoint (approximately a ~100% increase versus prior guidance), reflecting the impact of recent transactions.
Read all positive updates
Company Guidance
Management reaffirmed second‑half 2026 guidance that incorporates Frontera and the Ecopetrol partnership, with production guidance nearly doubled to a midpoint of ~86,000 bbl/d; Q2 production averaged >54,000 BOE/d (current run‑rate >83,000 BOE/d), LLA‑111 is averaging >5,000 bbl/d, and Casabe & Llanito are ~15,000 b/d gross. At a $90/bbl Brent assumption they expect funds flow from operations of $475–$525 million in H2 against capital expenditures of $275–$295 million, plan to drill up to 20 wells over the next 12 months, have a $250 million 5‑year capital program with zero upfront acquisition cost, and reported pro forma PDP and 1P reserves increased by >80%; they noted $59 million of one‑time transaction fees (plus realized hedging losses) and warned that El Niño, Colombian peso appreciation and wider Vasconia differentials are pushing production costs toward the upper end of guidance, while expecting significant free cash flow to fund reinvestment, balance‑sheet strength and returns.Parex Resources Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
63
Positive
Cash Flow
67
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.06B | 896.40M | 1.09B | 1.17B | 1.31B | 900.20M |
| Gross Profit | 443.27M | 375.77M | 753.68M | 889.83M | 1.11B | 728.57M |
| EBITDA | 527.00M | 458.06M | 682.48M | 659.18M | 957.67M | 628.62M |
| Net Income | 563.20M | 259.55M | 60.68M | 459.31M | 611.37M | 303.11M |
Balance Sheet | ||||||
| Total Assets | 4.23B | 2.34B | 2.16B | 2.42B | 2.31B | 1.78B |
| Cash, Cash Equivalents and Short-Term Investments | 224.42M | 108.64M | 98.02M | 140.35M | 419.00M | 378.34M |
| Total Debt | 813.86M | 42.07M | 64.62M | 95.74M | 6.08M | 4.51M |
| Total Liabilities | 1.88B | 387.45M | 323.74M | 459.90M | 599.38M | 390.53M |
| Stockholders Equity | 2.35B | 1.95B | 1.83B | 1.96B | 1.71B | 1.39B |
Cash Flow | ||||||
| Free Cash Flow | 190.38M | 228.09M | 343.89M | 26.11M | 453.36M | 322.15M |
| Operating Cash Flow | 411.85M | 432.19M | 569.91M | 376.47M | 983.60M | 534.30M |
| Investing Cash Flow | -679.48M | -309.36M | -392.24M | -535.51M | -638.10M | -229.04M |
| Financing Cash Flow | 335.29M | -165.72M | -214.90M | -130.63M | -291.98M | -252.35M |
Parex Resources Technical Analysis
Positive
23.59
Price Trends
23.84
Positive
25.10
Positive
22.23
Positive
Market Momentum
0.73
Negative
67.98
Neutral
93.51
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 23.59 is below the 20-day moving average (MA) of 24.10, below the 50-day MA of 23.84, and above the 200-day MA of 22.23, indicating a bullish trend. The MACD of 0.73 indicates Negative momentum. The RSI at 67.98 is Neutral, neither overbought nor oversold. The STOCH value of 93.51 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
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | C$2.55B | 3.27 | 27.68% | 6.53% | 13.63% | 361.28% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
63 Neutral | C$1.85B | 21.79 | 4.91% | ― | 6.20% | 55.63% | |
62 Neutral | C$2.41B | -5.32 | -19.54% | 3.34% | -2.21% | -142.44% | |
62 Neutral | C$2.01B | 32.73 | 6.96% | 6.27% | 17.51% | -35.86% | |
60 Neutral | C$1.94B | 33.88 | 4.95% | ― | 30.30% | -24.69% | |
57 Neutral | C$2.49B | 34.83 | 10.71% | ― | 76.79% | 82.39% |
* Energy Sector Average
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Parex Resources
26.54
11.61
77.74%
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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.