Analyst Actions: Canadian Oil Sands Ests Reduced at Credit Suisse

By Midnight Trader,  May 01, 2012, 12:05:02 PM EDT

Q112 Results + Dividend Increase: COS has reported CFPS of C$0.92 for Q112, above our C$0.91 estimate and consensus of C$0.90. The company announced a dividend increase from the current C$0.30/sh to C$0.35/sh for Q2 2012. This was above our flat C$0.30 estimate and consensus of C$0.30.

Guidance Changes: COS has reduced its 2012 production guidance to 301 kb/d (range of 290.4 kb/d to 312 kb/d), down from previous guidance of 309 kb/d (range was 290 kb/d to 320 kb/d). We have reduced our Q2 production estimate from 253 kb/d to 228 kb/d, in line with 'notional' company guidance. However, our H212 forecast for production to average ~320 kb/d remains unchanged (below 'notional' guidance of 336.9 kb/d), but we note Syncrude has only ever achieved this level of production over a single quarter. Our 2012 production forecast is now 291.8 kb/d (vs 297.3 kb/d previously).

2012 Capex Reduction + Project Estimate Update: In addition, 2012 capex has been reduced by C$241 million (from C$1,460 million to C$1,219 million) due to timing adjustments of major project spending. The expected completion dates and estimated costs for the major projects are not affected. We note, however, that the 'estimated accuracy' for cost estimates on the Aurora North Mine Train Relocations & Aurora North Tailings Management have been reduced from '+/- 25%' to '+/- 15%'.

Revising Estimates: Adjusting for Q1 results and changes to guidance, we have revised our EPS/CFPS forecasts as summarized in the full report. We are lowering our 2012/2013/2014 EPS estimates to C$2.51/C$3.78/C$4.00 (from C$2.67/C$3.83/C$4.06).

Valuation: Our C$27.00 target price continues to be based on 5.25x 2013E EBIDAX of C$2,508 million, in line with our C$27.00/sh NAV. The shares are trading at 4.3x 2013E EBIDAX vs. 4.1x for Suncor and 7.1x for Cenovus




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.


This article appears in: Investing, Commodities

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