Baytex Energy (BTE) Valuation Update - Mar 1

[dan_s]

At the time of this post BTE was trading for $4.49Cdn and $3.30US

I have updated my forecast/valuation model for BTE's Q4 results and updated guidance for 2024.
I have lowered my valuation multiple from 4.0 to 3.75 X annualized operating cash flow.
My current valuation is adjusted $0.15US lower to $6.20US per share.

TipRanks: 5 energy sector analysts have updated their price targets since the company released Q4 results.
Their price targets range from $6.00Cdn to $7.00Cdn < RBC Capital

Baytex's Q4 results (the ones that count) were actually slightly better than my forecast. The Company's production will be down in Q1 due to a small asset sale and normal weather related operational issues during the winter. After Q1 their production should ramp up, with the majority of growth being oil. My forecast is based on the midpoint of their guidance of 153,000 Boepd (72% oil & condensate, 12% NGLs and 16% natural gas). The Company's 2024 exit rate should be over 160,000 Boepd.

Baytex should generate over $600Cdn million of free cash flow during 2024 and 50% will be used for stock buybacks and dividends.
Their balance sheet is in good shape, and they have no near-term debt problems. 50% of free cash flow will be used to pay down their revolver.