CA - Imperial Oil upgraded at BMO as Q3 unleashes 'cash bonanza'

Imperial Oil ( NYSE: IMO ) +1.3% in Monday's trading as BMO Capital upgraded shares to Outperform from Market Perform with a C$85 price target, raised from C$70, after Q3 earnings topped expectations and unleashed a "cash bonanza."

BMO analyst Randy Ollenberger noted Imperial Oil's ( IMO ) Q3 cash flow came in at $4.06/share compared with the firm's estimate of $3.61 and $3.50 analyst consensus, and expects the company will deliver above average cash flow per share over the 2021-23 period while free cash flow yield screens in-line with peers on much lower leverage.

The company reported Q3 upstream income of C$986M, compared with BMO's C$862M estimate, while the downstream segment enjoyed a very strong quarter, with refinery throughput averaging 426M bbl/day - 100% utilization for the first time in 40 years.

Ollenberger believes Imperial ( IMO ) is well positioned to maintain an aggressive pace of share buybacks through 2023, which should drive additional share price appreciation.

Imperial Oil ( IMO ) surged 8.5% last Friday after posting better than expected Q3 adjusted earnings and revenues .

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