VET - Vermilion Energy cut to Hold at TD Securities on tempered outlook

2023-03-29 14:32:07 ET

Vermilion Energy ( NYSE: VET ) -3.5% in Wednesday's trading as TD Securities downgraded the stock to Hold from Buy with a C$21 price target, cut from C$29, citing diminished near-term European gas price upside and "recent surprises."

Although European gas prices could rally in H2 2023 on tighter fundamentals, Vermilion's ( VET ) "torque is now much lower," TD analyst Menno Hulshof wrote.

Vermilion ( VET ) continues to represent deep value vs. peers, but it "currently lacks the operating momentum and visibility to justify a Buy rating," according to Hulshof, while acknowledging the company's outlook "has the potential to improve dramatically into year-end."

The "recent surprises" included the sale of non-core assets in Saskatchewan asset, which reduced 2023 production guidance by 6% but left the C$570M budget unchanged.

On Wednesday, the company confirmed the closing of the Saskatchewan sale for $225M in gross proceeds.

Analysts at J.P. Morgan recently upgraded Vermilion Energy ( VET ) to Overweight, citing valuation .

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