Vermilion Energy Inc. : Increase of volatility

12/22/2021 | 02:33am EDT

Jordan Dufee

long trade Target price hit

Entry price : 15.03CAD | Target : 20CAD | Stop-loss : 12CAD | Potential : 33.07%

A strong break-out to the upside has recently been seen in Vermilion Energy Inc.. The current technical chart pattern could allow for a continuation of the upward dynamic. Investors have an opportunity to buy the stock and target the CAD 20.

Summary

• The company has strong fundamentals. More than 70% of companies have a lower mix of growth, profitability, debt and visibility.
• Overall, and from a short-term perspective, the company presents an interesting fundamental situation.
• According to Refinitiv, the company's ESG score for its industry is good.

Strengths

• The company's EBITDA/Sales ratio is relatively high and results in high margins before depreciation, amortization and taxes.
• The equity is one of the most attractive in the market with regard to earnings multiple-based valuation.
• The company appears to be poorly valued given its net asset value.
• The company has a low valuation given the cash flows generated by its activity.
• Over the last twelve months, the sales forecast has been frequently revised upwards.
• Growth remains a strong point in this company. In their sales forecast, analysts sound optimistic with regard to sales prospects.
• For the past year, analysts covering the stock have been revising their EPS expectations upwards in a significant manner.
• For the past twelve months, EPS forecast has been revised upwards.
• The average price target of analysts who are interested in the stock has been strongly revised upwards over the last four months.
• Analyst opinion has improved significantly over the past four months.
• Over the past twelve months, analysts' opinions have been strongly revised upwards.
• The group usually releases upbeat results with huge surprise rates.

Weaknesses

• The company's earnings growth outlook lacks momentum and is a weakness.
• The company is in debt and has limited leeway for investment
• The firm pays small or no dividend to shareholders. For that reason, it is not a yield company.

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