BMO Capital Markets on Tuesday reiterated its market-perform rating on the shares of Baytex Energy (BTE.TO, BTE) while lowering its price target to C$2.50 from an undisclosed prior level following first-quarter results from the oil and gas producer.
"Baytex has a strong foothold in Canada's top-tier Clearwater and Mannville heavy oil plays. These assets deliver payouts within 12 months and 2x payout within a few years. The issue at hand however are the company's Eagle Ford wells, which take 2-3 years before payout at current WTI prices. For Q1, investors were likely hoping for a more aggressive spending cut, to protect against an elevated balance sheet and 'get ahead' if low commodity prices persist. We are lowering our target price to $2.50 due to elevated risk," analyst Jeremy McCrea wrote.
(MT Newswires covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://www.mtnewswires.com/contact-us)
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