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Opinions Eric Nuttall
Vermilion Energy IncVET.TOCOMMENTMay 15, 2020
Eric NuttallStock price when the opinion was issued
As of Jun 19, 2026. Market Open.
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Premium contentOur PAST TOP PICK with VET has triggered its stop at $18. To remain disciplined, we recommend covering the position at this time. This will result in a net investment loss of 5%, when combined with our previous recommendations.
Premium contentWe again reiterate VET as a TOP PICK. Cash reserves are growing, while debt is retired and shares bought back. It trades under book value and supports a ROE of 36%. We continue to recommend a stop at $18, looking to achieve $25 -- upside potential of 23%. Yield 1.7%
(Analysts’ price target is $25.18)It has exposure to European gas and has had excess profits. European governments decided to tax these profits so this brought the share price down. Also European gas prices have been coming down. If you want exposure to gas go to a diversified company. She does not have exposure to energy producers.
Premium contentWe again reiterate VET as a TOP PICK. The company has aggressively reduced debt all the way down to one year's cash flow and its energy portfolio is well diversified. It trades at 6x earnings, under book value and supports a 36% ROE. We recommend trailing up the stop (from $16) to $18, looking to achieve $25 -- upside potential over 25%. Yield 1.8%
(Analysts’ price target is $25.18)Premium contentWe reiterate VET as a TOP PICK following recently reported earnings, that saw EPS beat expectations by over 30%. It trades at 7x earnings, under book value and supports a ROE of 36%. Cash reserves are growing while the company aggressively retires debt and buys back shares. We recommend trailing up the stop (from $14.50) to $16.00, looking to achieve $24.50 -- upside potential of 27%. Yield 1.8%
(Analysts’ price target is $24.57)Premium contentWith strong cash flows allowing aggressive debt retirement and share buybacks, we reiterate VET as a TOP PICK. About one-third of its production is based outside North America, diversifying its cash flow. Windfall taxes in Europe, have taken some of the wind out of the sales, but the fundamentals still look good as it supports a 68% ROE and trades at 3.5x free cash flow versus peers at 7x. We recommend trailing up the stop (from $13.00) to $14.50, looking to achieve $25.00 – upside potential over 40%. Yield 1.9%
(Analysts’ price target is $25.85)
Premium contentVET holds oil and gas production in North America, Europe and Australia. Much of its production is based off Brent oil pricing. JP Morgan just upgraded them to overweight. Quarterly cash flow has increased to allow a sizable reduction in debt and shares to be bought back. We like the ROE of 48%. We recommend placing a stop-loss at $13, looking to achieve $30 -- upside potential over 60%. Yield 1.5%
(Analysts’ price target is $29.73)
ARX vs VET ARX holds super high quality liquids assets in the Montney formation. VET has a more diversified production slate including Australia and the Netherlands as well as Canada. The US has shut in 1.4 million barrels a day, this has reduced associated natural gas production. This will tighten the natural gas markets making it much more bullish. This is helpful for ARX, more so. He has not been a huge supporter of the VET management team and is less bullish on European natural gas markets (where VET is more active). ARX also provides a better dividend stream.