Analyst Randy Ollenberger of BMO Capital maintained a Buy rating on MEG Energy (MEGEF – Research Report), with a price target of C$34.00.
Randy Ollenberger has given his Buy rating due to a combination of factors that highlight MEG Energy’s strong position in the market. The company’s Q4/24 results were in line with expectations, showcasing its ability to manage operating costs effectively despite higher-than-expected expenses, thanks to stronger bitumen realizations. MEG’s production levels are expected to improve further, with anticipated increases in the second half of 2025 following a turnaround in Q2/25.
MEG Energy’s capital allocation strategy is another reason for the Buy rating, as the company generated significant free cash flow in Q4/24, which was returned to shareholders through dividends and share repurchases. With a strong balance sheet and a low net debt level, MEG is well-positioned to continue delivering high yields. Additionally, its valuation is attractive, with a 2025 estimated EV/EBITDA multiple and free cash flow yield that align with its peers, yet its efficient oil sands assets and growth trajectory suggest a potential premium. This combination of operational efficiency, financial strength, and strategic asset management underpins Ollenberger’s positive outlook on MEG Energy.
In another report released on February 18, Scotiabank also initiated coverage with a Buy rating on the stock with a C$33.00 price target.
Based on the recent corporate insider activity of 49 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of MEGEF in relation to earlier this year.