Precision Drilling (PDS – Research Report), the Energy sector company, was revisited by a Wall Street analyst yesterday. Analyst John Gibson CFA from BMO Capital reiterated a Buy rating on the stock and has a C$130.00 price target.
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John Gibson CFA’s rating is based on a combination of factors, including Precision Drilling’s strategic financial decisions and its strong market position. Despite reporting Q4/24 results that fell below expectations, the company has outlined a clear plan to enhance shareholder returns by increasing the proportion of free cash flow allocated to stock buybacks, targeting 35-45% this year compared to approximately 30% in 2024.
Additionally, Precision Drilling is committed to reducing its debt by about $100 million in 2025, contributing to a broader strategy to decrease total debt by $700 million from 2022 to 2027. The company’s dominant position in the Canadian market, along with its fleet of top-tier rigs, positions it well to take advantage of favorable drilling day rates. These strategic initiatives, combined with the target price of $130 reflecting a 3.7x 2026E EV/EBITDA, support the Buy rating recommendation.
According to TipRanks, Gibson CFA is a 5-star analyst with an average return of 22.7% and a 58.40% success rate. Gibson CFA covers the Energy sector, focusing on stocks such as Precision Drilling, CES Energy Solutions, and Trican Well Service.
In another report released today, Benchmark Co. also maintained a Buy rating on the stock with a C$115.00 price target.