I have updated my forecast/valuation model for Peyto's solid Q1 results that beat my forecast. I have adjusted my natural gas realized prices in future periods for the impact of their hedging program and their high BTU gas. Peyto's realized natural gas price in Q1 2025 was $4.17Cdn/mcf, compared to their realized price of $3.43/mcf in Q4 2024.
At the time of this post PEY.TO was trading at $19.39. Annualized dividends should be $1.32/share for yield of ~6.8%. < Peyto will be generating a lot of free cash flow this year, so a dividend increase is likely.
My current valuation is $24.50Cdn or approximately $17.15US for PEYUF. < Compares to First Call's current price target of $20.57Cdn, which has not been updated for the Company's outstanding Q1 results.
This one is a rock solid "Gasser" with annual production growth of 8% to 10% that is easy to forecast.
My updated forecast/valuation model has been posted to the EPG website under the High Yield tab.
Peyto Exploration & Dev. (PEY.TO) Valuation Update - May 14
Peyto Exploration & Dev. (PEY.TO) Valuation Update - May 14
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group