Analyst John Gibson of BMO Capital reiterated a Buy rating on Trican Well Service (TOLWF – Research Report), with a price target of C$6.00.
John Gibson’s Buy rating for Trican Well Service (TOLWF) is influenced by a multitude of factors. Firstly, Trican’s Q3/23 results matched the expectations, indicating stability in the company’s performance. Additionally, Trican’s work in the WCSB region is seeing increased activity and is expected to intensify even more in 2024. Despite the slight pricing pressure faced in the quarter, equipment supply and demand are anticipated to attain equilibrium in late 2023 to early 2024. Furthermore, Trican’s target price remains at $6.00, reflecting 4x 2024 EV/EBITDA, which supports Gibson’s Outperform rating.
Gibson is also optimistic about the improving supply and demand fundamentals in the WCSB region moving into 2024. Despite facing competitive pricing pressure, Trican is expected to roll out more equipment in early 2024 to meet the strong demand. The company’s capital return strategy, involving the repurchase of millions of shares, indicates strong financial standing. Trican’s EBITDA estimates for 2023 and 2024 are $245 million and $271 million respectively, and the company is well-positioned with high-quality pressure pumping equipment. Given the positive outlook for activity levels in 2024, Gibson maintains his Outperform rating and views the stock favorably.
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Trican Well Service (TOLWF) Company Description:
Trican Well Service Ltd. engages in the provision of products, equipment, services, and technology used in drilling, completion, stimulation, and reworking of oil and gas wells primarily through its continuing pressure pumping operations in Canada. The company was founded on April 11, 1979 and is headquartered in Calgary, Canada.
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