Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (CAD) | Target 1 (CAD) | Target 2 (CAD) | Holding Duration | Potential Upside* |
|---|---|---|---|---|---|---|---|
| 12 May, 25 | TOU | Buy | CAD 62.55 | CAD 65.8 | CAD 66.8 | 10 days | 6.8% |
*Potential Upside (%) indicates the expected percentage increase from the Entry Price to the Target 2 Price.
Data Powered by EOD Historical Data (“EODHD”).
Tourmaline Oil Corp. explores for and develops oil and natural gas properties in the Western Canadian Sedimentary Basin. The company holds interests in properties located in the Alberta Deep Basin, Northeast British Columbia Montney, and the Peace River High Triassic oil complex. Tourmaline Oil Corp. was incorporated in 2008 and is headquartered in Calgary, Canada.
Higher Gross Margin: 98.7% in FY 2024 vs 55.2% of Industry Median
Higher Operating Margin: 33.1% in FY 2024 vs 22.1% of Industry Median
Lower Asset Turnover Ratio: 0.25x in FY 2024 vs 0.40x of Industry Median
Lower Pretax ROE: 11.2% in FY 2024 vs 15.1% of Industry Median
Commodity Price Volatility, Trade Tariff, Supply Chain Issues, Inflationary Pressures, etc
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 62.55 | 58.8 | 65.8 | 66.8 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Operational Outperformance: The company delivered a decent Q1 2025 production of 637,867 boepd, exceeding the upper end of its guided range (630,000 boepd - 635,000 boepd) and marking an 8% YoY increase. This decent performance reflects healthy results across both the NEBC Montney and Alberta Deep Basin.
Decent Free Cash Flow Generation: Despite a capita intensive quarter with CAD 797.7 mn EP spending, the company generated CAD 149.1 mn in Free Cash Flow. Full year guidance remains decent with CAD 960.0 mn FCF forecasted for 2025 at strip pricing, supporting both organic growth and shareholder returns.
Dividends and Yield Visibility: The management declared a special dividend of CAD 0.35 per share and signaled intent for a CAD 0.50 per share quarterly dividend, supported by FCF strength. TOU offers a compelling income component on top of growth, reinforcing its shareholder focused capital return framework.
Considering the expected valuation upside, guided capital discipline, diversified gas exposure, a ‘Buy’ recommendation has been given on the stock at the last closing price of CAD 62.55, as on May 09, 2025.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Energy Industry: Oil & Gas E&P
| Company | Change (CAD) | Price (CAD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| TOU Tourmaline Oil Corp. |
-1.09 1.72% | 62.23 | 14.42 | 10.96 | 5.30 | 1.64 | 4.12 | 6.49 |
| CNQ Canadian Natural Resources Ltd |
-0.81 1.91% | 41.68 | 13.55 | 12.48 | 2.82 | 2.52 | 2.67 | 6.50 |
| OVV Ovintiv Inc |
-0.96 1.90% | 49.50 | 5.72 | 10.39 | 1.64 | 1.06 | 1.78 | 3.44 |
| ARX ARC Resources Ltd. |
-0.56 1.92% | 28.58 | 11.94 | 9.67 | 2.92 | 1.91 | 3.07 | 5.55 |
| PSK PrairieSky Royalty Ltd |
-0.2 0.88% | 22.55 | 31.40 | 28.57 | 14.50 | 2.52 | 13.74 | 15.49 |
Data Powered by EOD Historical Data (“EODHD”).
Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is May 09, 2025. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
Disclaimer :
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