Surge Energy (SGY-TSX) Price Target - Mar 30

[dan_s]

Today I am finishing my review of our updated profile on Surge Energy (SGY.TO and ZPTAF in the U.S.)

TipRanks 3-20-2024
Surge Energy (ZPTAF) has received a new Buy rating, initiated by BMO Capital analyst, Jeremy Mccrea. His price target is $10.00Cdn
SGY.TO closed at $7.71Cdn on March 28.

Jeremy Mccrea has given his Buy rating due to a combination of factors that suggest Surge Energy is poised for strong performance. These factors include a significant improvement in the performance of their underlying assets, an attractive valuation that suggests the stock is currently undervalued, and the fact that the company is not on most investors’ radars, offering a potentially advantageous entry point for those who take notice. Mccrea’s analysis points to recent advancements in drilling techniques and promising well results as indicators of Surge Energy’s potential for growth and increased valuation.

Additionally, Mccrea’s assessment is built upon a 4-point checklist that evaluates the quality and longevity of the company’s inventory, the valuation relative to future growth, the asymmetric risks associated with the operator, and the market sentiment and timing regarding the sub-sector. He notes the change in drilling mud systems that has led to significantly better results in recent wells and is closely watching the outcome of an innovative multi-lateral drilling project that could lead to surprising and positive results for the market. These technical improvements, along with the strategic operational moves, signal that Surge Energy is on a trajectory that could lead to outsized gains, particularly if the WTI prices see an upward trend.

In another report released on March 8, Stifel Nicolaus also assigned a Buy rating to the stock with a C$10.00 price target.