Strathcona Resources (TSE: SCR) has faced a significant adjustment in its financial outlook as ATB Capital reduced its price target from C$42.00 to C$32.00. This change was reported on Tuesday morning and reflects a broader trend among analysts reassessing the company’s stock value.
In addition to ATB Capital’s revision, several other financial institutions have updated their assessments of Strathcona Resources. National Bankshares lowered its price target from C$38.00 to C$36.00, maintaining a “sector perform” rating as of October 22, 2023. Similarly, Royal Bank of Canada raised its target from C$36.00 to C$40.00, also assigning a “sector perform” rating in a note dated October 16, 2023.
TD Securities adjusted its price goal for Strathcona Resources from C$35.00 to C$36.00, issuing a “hold” rating on November 7, 2023. Scotiabank took a more bullish stance by increasing its target from C$34.00 to C$40.00, while rating the stock as “outperform” on October 14, 2023. Jefferies Financial Group also made a notable adjustment, raising its target from C$34.00 to C$38.00 on November 11, 2023.
The overall consensus among analysts presents a mixed yet cautious outlook. According to data from MarketBeat, Strathcona Resources has garnered one “Strong Buy” rating, one “Buy” rating, and six “Hold” ratings. The consensus rating for the stock remains at “Hold,” with an average price target set at C$35.43.
Recent Dividend Declaration
In addition to the price target changes, Strathcona Resources recently announced a quarterly dividend of C$0.30 per share, which was paid on December 15, 2023. This dividend represents an annualized payout of C$1.20 and offers a yield of 4.1%. The ex-dividend date was set for December 5, 2023. Currently, the company’s dividend payout ratio stands at 21.68%, indicating a sustainable approach to returning value to shareholders.
Strathcona Resources Ltd. operates primarily in the oil and gas sector, focusing on thermal oil, enhanced oil recovery, and liquids-rich natural gas. The company has three key operations: Lloydminster Heavy Oil, Cold Lake Thermal Oil, and Montney. The Lloydminster Heavy Oil segment includes substantial oil-in-place reservoirs with ongoing enhanced oil recovery (EOR) initiatives located mainly in southwest Saskatchewan.
The Cold Lake Thermal properties utilize steam-assisted gravity drainage (SAGD) processes, similar to those employed in its Saskatchewan thermal properties, showcasing the company’s commitment to efficient resource extraction.
As these developments unfold, investors will be keeping a close eye on Strathcona Resources and the broader industry dynamics that may influence future performance.
