CPG - Crescent Point Energy: Undervalued Despite A Promising Free Cash Flow Generation

• CPG’s total average selling price increased from C$58.65 in 1Q 2021 to C$ 91.43 in 1Q 2022.
• EU leaders agreed to ban Russian oil imports by 90%. Moreover, west sanctions against Iran are continuing. Thus, I don’t expect oil and natural gas prices to fall.
• With a WTI oil price of around $100 for the second half of 2022, I predict an excess cash flow of more than $1.4 billion for Crescent Point.
• Analyzing Crescent Point Energy’s financial condition indicates that the stock has good scope for investment.
• Using the Discounted Free Cash Flow model, I evaluate that CPG is worth $13 per share.

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