Petro-Canada: Good News, Bad News

The good news is that Petro-Canada (PCZ) delivered better-than-expected results this week. And the bad news? There’s not a lot looming in the near future that will rev up the stock, which is a laggard amongst its peers.

“In the short term the stock continues to lack any meaningful catalyst and short-term growth,” Andrew Potter, an analyst at UBS, said in a note on Tuesday. Despite this, he is still a Petro-Can fan, calling the stock a “buy,” and pegging it at C$63.

Over at RBC Capital Markets, Gordon Gee is not so sure. According to him, the stock is worth nothing more than C$55, and labeled it as “sector perform.”

He notes the integrated oil company has a string of planned shutdowns between now and August, and therefore, Mr. Gee thinks the company will come in at the low-end of its production range. Petro-Canada expects to churn out 390 mboe/d to 420mboe/d this year.

It faces four shutdowns:

A 60-day planned turnaround at its Edmonton refinery beginning in August.

A 15-day turnaround at MacKay River in May.

A 16-day maintenance turnaround at Tera Nova in June.

A 45-day turnaround on Coker 8-1 at Syncrude in April.

One more thing to watch for: Petro-Canada changed its accounting system in its downstream division.

The result? Justin Bouchard, an analyst at Raymond James Ltd. explained:

As there will now be a time delay between when inventory is classified as bought and sold, earnings may become slightly more volatile from this division.