Whitecap Resources (WCP.TO) Valuation Update - Feb 24

[dan_s]

Yesterday Whitecap announced strong Q4 2025 results. Production exceeded my forecast and more importantly their adjusted operating cash flow exceeded my forecast by a wide margin, primarily because of a $162.8Cdn million cash settlement of acquired risk management contracts. It is a onetime cash settlement, so it does not have much impact on my stock valuation. However, it shores up an already solid balance sheet.

I have updated my forecast/valuation model for Whitecap for their Q4 actual results and guidance for 2026, which looks very conservative to me. So, my forecast for 2026 is based on the high end of their guidance, which is 370,000 to 375,000 Boepd. The production mix is 48.5% crude oil, 12.0% NGLs and 39.5% natural gas. Whitecap gets much better than average pricing for its gas, $2.95Cdn/mcf in Q4. They have recently announced some very good gas marketing agreements.

My valuation of WCP.TO increases by $1.00 to $16.00Cdn, which agrees with the updated price target of Luke Davis, a 5-Star rated energy sector analyst at Raymond James who now rates WCP.TO "Outperform". Seven energy sector analysts have submitted price targets to TipRanks in the last three months and they all rate the stock a BUY. Whitecap is a highly respected Canadian large-cap.

At the time of this post WCP.TO was trading for $13.64Cdn.

In addition to 17.5% upside, Whitecap pays monthly dividends of $0.0608/share ($0.7296Cdn/year), which is annual yield of ~5.34%.