As expected, Baytex Energy Trust (BTE) chopped its monthly payout to shareholders Wednesday, down from C$0.18 a month to C$0.25, a 28% drop. It also unveiled a modest spending plan.
To paraphrase reaction from the analysts: Buy! Buy lots! Or at the very least, hold!
To properly quote reaction from the analysts:
Canaccord Adams:
Baytex remains our top pick within the energy trust space, and we continue to believe there is significant long-term development and value potential in its existing heavy oil assets and potentially from its new light oil resource plays.
Buy, with a C$26 target price.
Jeff Martin, an analyst at Peters & Co. Ltd:
We continue to be impressed with the trust’s operational results and its focus on adding additional drilling inventory, thereby positioning itself to successfully convert to a corporation in 2011. However, we believe the distribution cut announced [Wednesday] was not enough and, in the context of current commodity prices, adds too much incremental debt throughout 2009.
Sector perform, with a C$17 target price.
Kristopher Zack, an analyst at Raymond James:
We like the financial discipline demonstrated by the trust given the sharp decline in commodity prices.
Outperform, with a C$22 target price.
Grant Hofer, UBS Securities Inc:
"We view this as a prudent move." Buy, with a C$21.50 price target.
