Whitecap Resources (WCP-T). Raymond James analyst Jeremy McCrea likes $565-million all-stock acquisition of Torc Oil & Gas (TOG-T) The McCrea upgraded Whitecap to "strong buy" from "outperform," while bumping his share target up by $1.25 to $5.50. Analysts on average target the shares at $4.03.
Mr. McCrea says in note: "Back with Q3, WCP hinted that 'maybe we start to bring strong on strong together versus many of the past deals that have been weak on weak.' Whitecap followed through with that statement with its announced merger with TORC, creating a 100 mboe/d, oil-weighted company.
More importantly, both entities have a history of return focused culture, that with additional scale, negotiating power, and cost synergies, should continue to drive top tier profitability. Overall, the energy business is quickly changing and size and scope matter more than ever.
Whitecap is quickly showing it will be consolidator and as we've seen with other acquirers in the Canada and U.S., strong with strong transactions are typically rewarded. We expect a number of new shareholders could begin a buying spree over the next several months." |
