NuVista Energy Ltd.'s (OTC:NUVSF) better-than-expected first quarter cash flow results have the stock jumping and analysts ratcheting up their price targets.
Shares in the intermediate oil & gas producer are up more than 10% on Tuesday morning, after the company's operating cash flow came in above forecasts hitting C$.66 per share thanks largely to lower-than-expected royalty rates.
RBC Capital Markets analyst Jason Bouvier added a loonie to his target, and now expects the stock to hit C$10. He also maintained his "outperform" rating.
We feel NVA continues to capitalize on M&A opportunities and is allocating its exploration and development program in an efficient manner by focusing on the highest return assets.
He added that NuVista represents good value, noting the stock trades at a enterprise value to debt-adjusted cash flow multiple of 5.6x compared to a peer average of 7.6x.
Blackmont analyst Hanif Kassam maintained his "buy" recommendation and raised his price target from C$10.50 to C$11.
Hanif Kassam, Blackmont analyst, said:
With both a large and diverse production base, along with an acquisition track record, we believe NuVista's business model is well suited to the current macro environment.
The Wapiti core property stands to offer shareholders significant upside (if successful), a feature we believe [is] not reflected in the current share price.