ARC Resources Ltd.

TSX:ARX Stock Report

Market Cap: CA$15.1b

ARC Resources Valuation

Is ARX undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of ARX when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: ARX (CA$25.84) is trading below our estimate of fair value (CA$44.33)

Significantly Below Fair Value: ARX is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for ARX?

Key metric: As ARX is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for ARX. This is calculated by dividing ARX's market cap by their current earnings.
What is ARX's PE Ratio?
PE Ratio12.2x
EarningsCA$1.26b
Market CapCA$15.08b

Price to Earnings Ratio vs Peers

How does ARX's PE Ratio compare to its peers?

The above table shows the PE ratio for ARX vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average17.3x
TOU Tourmaline Oil
15x25.5%CA$23.2b
SCR Strathcona Resources
8.9x-9.6%CA$6.9b
MEG MEG Energy
13.4x-1.3%CA$6.8b
PSK PrairieSky Royalty
31.8x2.1%CA$7.0b
ARX ARC Resources
12.2x13.2%CA$15.1b

Price-To-Earnings vs Peers: ARX is good value based on its Price-To-Earnings Ratio (12.2x) compared to the peer average (17.3x).

Price to Earnings Ratio vs Industry

How does ARX's PE Ratio compare vs other companies in the CA Oil and Gas Industry?

7 CompaniesPrice / EarningsEstimated GrowthMarket Cap
HAM Highwood Asset Management
1.2x-43.9%US$62.92m
ALPS.U Alpine Summit Energy Partners
1xn/aUS$24.02m
KUB.H Carcetti Capital
0.7xn/aUS$5.82m
GCOM Green Shift Commodities
1.6xn/aUS$4.89m
ARX 12.2xIndustry Avg. 11.1xNo. of Companies11PE0816243240+
7 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: ARX is expensive based on its Price-To-Earnings Ratio (12.2x) compared to the Canadian Oil and Gas industry average (10.8x).

Price to Earnings Ratio vs Fair Ratio

What is ARX's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

ARX PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio12.2x
Fair PE Ratio15.5x

Price-To-Earnings vs Fair Ratio: ARX is good value based on its Price-To-Earnings Ratio (12.2x) compared to the estimated Fair Price-To-Earnings Ratio (15.5x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst ARX forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentCA$25.84
CA$31.06
+20.2%
7.4%CA$35.00CA$27.00n/a16
Nov ’25CA$23.16
CA$30.62
+32.2%
8.4%CA$35.00CA$27.00n/a17
Oct ’25CA$23.64
CA$30.22
+27.8%
7.6%CA$35.00CA$27.00n/a16
Sep ’25CA$24.94
CA$30.84
+23.7%
7.0%CA$35.00CA$28.00n/a16
Aug ’25CA$23.39
CA$30.72
+31.3%
7.5%CA$35.00CA$27.00n/a16
Jul ’25CA$24.41
CA$30.34
+24.3%
7.6%CA$35.00CA$27.00n/a16
Jun ’25CA$25.79
CA$30.06
+16.6%
7.8%CA$35.00CA$26.00n/a16
May ’25CA$24.43
CA$29.00
+18.7%
7.7%CA$33.00CA$25.00n/a16
Apr ’25CA$24.41
CA$27.06
+10.9%
7.1%CA$32.00CA$25.00n/a16
Mar ’25CA$23.40
CA$26.72
+14.2%
7.4%CA$32.00CA$25.00n/a16
Feb ’25CA$20.77
CA$26.58
+28.0%
7.3%CA$32.00CA$24.00n/a16
Jan ’25CA$19.67
CA$27.42
+39.4%
8.3%CA$32.00CA$24.00n/a16
Dec ’24CA$22.13
CA$27.52
+24.3%
8.3%CA$32.00CA$23.50n/a16
Nov ’24CA$22.54
CA$25.47
+13.0%
9.0%CA$30.00CA$21.00CA$23.1616
Oct ’24CA$21.68
CA$24.34
+12.3%
8.6%CA$29.00CA$21.00CA$23.6416
Sep ’24CA$21.22
CA$23.64
+11.4%
8.6%CA$29.00CA$21.00CA$24.9418
Aug ’24CA$19.74
CA$23.03
+16.7%
9.4%CA$29.00CA$20.00CA$23.3918
Jul ’24CA$17.67
CA$22.59
+27.9%
10.3%CA$29.00CA$19.00CA$24.4116
Jun ’24CA$16.28
CA$22.47
+38.0%
10.7%CA$29.00CA$19.00CA$25.7916
May ’24CA$16.62
CA$22.16
+33.3%
12.8%CA$29.00CA$18.00CA$24.4316
Apr ’24CA$15.33
CA$22.66
+47.8%
12.8%CA$29.00CA$18.00CA$24.4116
Mar ’24CA$15.33
CA$23.22
+51.5%
13.8%CA$29.00CA$18.00CA$23.4016
Feb ’24CA$15.02
CA$24.22
+61.2%
9.8%CA$29.00CA$21.00CA$20.7716
Jan ’24CA$18.25
CA$25.29
+38.6%
9.5%CA$29.00CA$22.00CA$19.6714
Dec ’23CA$19.71
CA$25.07
+27.2%
8.6%CA$29.00CA$22.00CA$22.1314
Nov ’23CA$19.47
CA$25.14
+29.1%
9.0%CA$29.00CA$22.00CA$22.5414

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.

Discover undervalued companies

Precision Drilling

CA$1.2b

A drilling company, provides onshore drilling, completion, and production services to exploration and production companies in the oil and natural gas and geothermal industries in North America and the Middle East.

PD

CA$88.33

7D

-0.2%

1Y

13.3%

LNG Energy Group

US$15.6m

Focuses on the acquisition and development of natural gas production and exploration assets in Latin America.

LNGE

US$0.14

7D

20.8%

1Y

-51.7%

Alvopetro Energy

CA$173.2m

Operates as an independent upstream and midstream operator.

ALV

CA$4.74

7D

-3.5%

1Y

-36.4%