Consensus analyst targets for ARC Resources were marginally revised lower, primarily reflecting updated commodity price assumptions and sector outlooks despite ongoing confidence in the company’s strong operational performance and capital returns, resulting in a minimal price target reduction from CA$33.94 to CA$33.82.
Analyst Commentary
- Bullish analysts cited consistent operational performance and reaffirmed positive outlooks, reflected in maintained Outperform/Buy ratings despite minor target reductions or increases.
- Adjustments to price targets incorporated updated commodity price assumptions and sector outlooks, as well as recent quarterly results.
- Slight downward target revision from one analyst balanced by inclusion in Analyst Current Favorites, signaling continued confidence in ARC Resources' potential.
- Upward revisions from other analysts were attributed to improved expectations for cash flow generation and disciplined capital allocation.
- Consensus remains focused on ARC Resources’ strong free cash flow yield and ability to return capital to shareholders.
What's in the News
- ARC Resources announced a share repurchase program to buy back up to 57,967,896 shares (9.97% of issued capital), with shares to be cancelled to return capital to shareholders.
- The Board of Directors authorized the new buyback plan.
- Q2 2025 production increased to 357,228 boe/day (up from 330,046 boe/day); crude oil and condensate output rose to 100,399 bbl/day (up from 74,713 bbl/day), while NGLs production decreased slightly.
- Full-year 2025 production guidance was revised upward to incorporate the Kakwa Acquisition, with total production now expected at 385,000–395,000 boe/day and H2 production forecast above 410,000 boe/day.
- From April to June 2025, ARC repurchased 2.9 million shares (0.5%) for CAD 81.81 million, completing 10 million shares (1.7%) repurchased under the 2024 buyback program.
Valuation Changes
Summary of Valuation Changes for ARC Resources
- The Consensus Analyst Price Target remained effectively unchanged, moving only marginally from CA$33.94 to CA$33.82.
- The Discount Rate for ARC Resources remained effectively unchanged, moving only marginally from 6.18% to 6.28%.
- The Future P/E for ARC Resources remained effectively unchanged, at 11.21x.
Disclaimer
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