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Crescent Point Energy: Fair Price Target, Financial Upside Ahead of Earnings

Stock Markets May 11, 2022 14:57
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© Reuters.

By Ketki Saxena 

Investing.com – Canadian upstream oil and gas operator, Crescent Point Energy Corp (TSX:CPG). is set to report first-quarter 2022 earnings tomorrow morning, before the opening bell. 

The Calgary-based company explores, develops, and produces light and medium crude oil, natural gas liquids, and natural gas reserves in Western Canada and the United States.

Earnings per share are expected at C$ 0.41 on Revenue of C$1.075 B, compared to EPS of C$ 0.27 on revenue of C$900.4 M in the previous quarter.  

What else to know about Crescent Point Energy Shares

Crescent Point Energy will have benefited from the strength in energy commodities this quarter and has recently increased production in April, following its acquisition of Shell (LON:RDSa) Canada’s Kaybob Duvernay assets. Management forecasts production for 2022 at 133,000-137,000 boe/d, up from 133,000 boe/d at 2021 year-end. 

For 2022, management has also indicated a net debt target of 1.3B-$1.4B, which it expects to achieve in the next six months. Seeking Alpha notes this target would bring Crescent Point’s net debt to funds from operation ratio  to 0.96x at $80/bbl, or below the 1.0x mandate. Seeking Alpha also notes that CPG now hedges 50% of production with a ~$88/bbl USD sold call and a $77/bbl USD bought put. 

For 2022, management also predicts double-digit growth in earnings per share, including dividend yield. Crescent point currently offers a 2.12% dividend yield to investors. In the previous quarter, the company announced an increased quarterly dividend of 4.5 cents per share as of March 15 2022, up from its fourth-quarter dividend of three cents. No dividend increases have been announced so far this year. The company is currently targeting $150MM of share buybacks through the first two quarters of 2022. 

Fair Price Target (NYSE:TGT), Financial Upside

Year to date, Crescent Point has delivered a 22.9% total price return.

 As of 2:45 p.m ET, Crescent Point shares were trading at C$8.74, up 3.36% so far today, and with a 52-week range of C$3.56 - 10.33

Investing Pro models suggest a 12-month fair price target of 11.60, representing a 32.8% financial upside. 

 

Crescent Point Energy: Fair Price Target, Financial Upside Ahead of Earnings
 

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