Morningstar | We Are Lowering Our Crescent Point Fair Value Estimate; Stock Remains in 3-Star Territory
We are lowering our fair value estimate on no-moat Crescent Point Energy to $4 (CAD 5.50) from our previous estimate of $6 (CAD 7.50) to reflect our lower near-term commodity price forecasts--with the stock trading near $3.00 (CAD 4.50). Accordingly, it is trading in 3-star territory due to its extreme uncertainty, and we suggest that investors remain on the sideline.Although we consider Crescent Point's assets to contain several low-cost resource plays, high finding and developing costs on the firm's emerging assets dilutes the company's cost structure. Consequently, full-cycle breakeven prices exceed $60 per barrel of West Texas Intermediate, which compares unfavorably to our midcycle forecast of $55/bbl WTI.
We are maintaining our no-moat rating.
Crescent Point Energy is an oil and gas exploration, development and production company with assets focused in properties consist of crude oil and natural gas reserves. Co. is engaged in acquiring, developing and holding interests in petroleum and natural gas properties and assets related thereto through a general partnership and wholly owned subsidiaries. As of Dec 31 2016, net proved reserves for light and medium crude oil were 141,850 million barrels, heavy crude oil were 19,993 million barrels, tight oil were 269,461 million barrels, natural gas liquids were 50,767 million cubic feet, shale gas were 221,238 million cubic feet and conventional natural gas were 115,041 million cubic feet.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
We have operations in 27 countries.
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