Pengrowth Energy Gets a Sell Rating from Canaccord Genuity

By Austin Angelo

In a latest note to investors, a research analyst has provided a rating update for the Materials sector company, Pengrowth Energy (TSX: PGF). The company received a Sell today from Canaccord Genuity’s analyst Dennis Fong, with a C$0.90 price target.

Fong commented:

“We view this to be modestly encouraging as the waiver period is expected to provide Pengrowth with the financial flexibility and potential ability to restructure its remaining debt with covenant light debt and to start construction on the Phase 2 expansion at Lindbergh. While we still believe the company will eventually sanction the expansion at Lindbergh given the reservoir quality, we view the company’s ability to finance the project as relatively difficult in the current commodity price environment. High but manageable debt situation We estimate Pengrowth will show D/CF of 4.9x in 2018, above the group average of 2.6x. Through 2017 management has been successful in lowering outstanding leverage through the disposition of a number of assets.”

According to TipRanks.com, Fong is a 4-star analyst with an average return of 7.0% and a 56.3% success rate. Fong covers the Basic Materials sector, focusing on stocks such as Athabasca Oil Corporation, Whiting Petroleum Corp, and Freehold Royalties Ltd.

Currently, the analyst consensus on Pengrowth Energy is Moderate Sell and the average price target is C$1.04, representing a -20.6% downside.

In a report issued on October 6, AltaCorp Captial also downgraded the stock to Sell with a C$1 price target.

The company has a one-year high of C$2.32 and a one-year low of C$0.68. Currently, Pengrowth Energy has an average volume of 1.52M.

Pengrowth Energy Corp. is a Canadian oil and natural gas exploration company. The company engages in the development, acquisition, and exploration of oil and natural gas reserves in the provinces of Alberta, British Columbia, Saskatchewan and Nova Scotia. It focuses on the development of Western Canadian Sedimentary Basin.

The company’s shares closed on Thursday at C$1.31.