Markets

Analyst Actions: Credit Suisse Lifts Husky Energy EPS Estimates, Target Price

Raising Our EPS Estimates: "Taking into consideration the better than expected Q312 results (i.e., C$0.52 versus our C$0.29 estimate) and other operational adjustments, we are raising our operating EPS forecast from C$1.75 to C$2.06 for 2012 and from C$1.91 to C$1.97 for 2013. Our 2014 forecast has been trimmed from C$2.03 to C$2.02. As reported on November 1st, Husky posted strong operating earnings. Relative to our forecast, the drivers for the better than expected earnings were: 1) C$0.04/share in the U/S; 2) C$0.09 in U/G; 3) C$0.06 in Infrastructure; 4) C$0.03 in Canada D/S; 5) C$0.04 in US D/S, and; 6) (C$0.02) in Corporate."

Worth a Look for Yield: "While we continue to rate Husky 'Neutral' on a relative basis versus its large cap O&G peers in Canada based upon our expected return to target (15.3% vs. ~56% for 'Outperform' rated stocks), we believe the stock may be worth a 'second look' to investors seeking both yield and exposure in the energy sector. For example, Husky currently provides investors with a 4.3% yield compared with an average 2.5% yield for its large cap peers. However, we note the stock is trading at 5.5x 2013E EBIDAX versus an average of ~4.5x for its large cap 'Outperform' rated peers in our coverage universe and production per share growth is forecast to average only 4.0% per annum during the 2011-2016 timeframe versus ~12% for its large cap 'Outperform' rated peers in Canada. Thus, it is difficult to recommend purchasing the stock at this time as we see better value and growth in our large cap universe."

Valuation: "During the past 5 years, Husky's shares have traded on average 6.9x the current year's EBIDAX. We continue to use 6.5x 2013E EBIDAX of C$5,113 million (was C$5,062) to derive our revised C$32.00 target price (from C$31.00)."

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

Copyright (C) 2016 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited.


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

Other Topics

Commodities

Latest Markets Videos