International Petroleum (TSX:IPCO) Valuation in Focus After Buyback Completion and $450M Bond Refinancing

International Petroleum (TSX:IPCO) has just wrapped up a sizable buyback, canceling over 6% of its outstanding shares while also completing a USD 450 million bond issuance to refinance its debt. These moves signal a focus on capital discipline.

See our latest analysis for International Petroleum.

With the buyback and new bond issuance making headlines, investor confidence in International Petroleum’s capital stewardship appears to be on the rise. The share price has seen steady upward momentum, with a strong 1-year total shareholder return of 34% and an impressive 3-year return of 91%. This underscores the company’s ability to create long-term value.

If you’re interested in what else is gaining traction in the market lately, now is a smart time to expand your view and discover fast growing stocks with high insider ownership

With shares trading near their recent highs and the company continuing to post robust returns, the key question for investors now is whether International Petroleum is still fundamentally undervalued, or if the market has already priced in future growth opportunities.

Most Popular Narrative: 6.4% Undervalued

International Petroleum’s most widely followed narrative points to a fair value just above its recent close, suggesting the stock is modestly undervalued. The stage is set by long-term growth bets. Here is one catalyst from the narrative itself:

The imminent completion and ramp-up of Blackrod Phase 1 is expected to significantly increase long-life, low-cost production, materially improving operating cash flow and free cash flow from late 2026 onwards, supporting future revenue and earnings growth.

Read the complete narrative.

Want to know the real fuel behind this price? The secret: bold forecasts for production, margins, and profit growth that could shake up expectations. Get the inside story on the assumptions moving the fair value needle.

Result: Fair Value of $25.17 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, execution delays at Blackrod or unexpected cost overruns could quickly challenge the bullish case and reshape expectations for International Petroleum’s future growth.

Find out about the key risks to this International Petroleum narrative.

Another View: Market Multiples Tell a Different Story

While some valuation models see International Petroleum as undervalued, a look at the price-to-earnings ratio offers a reality check. The company trades at 35.5x earnings, much higher than industry peers (12.6x) and the fair ratio (19x). This suggests the market may be paying a steep premium. Is the optimism truly justified, or does it leave little margin for error?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own International Petroleum Narrative

If this perspective doesn’t match your own or you’d rather rely on your own research, you can shape your own narrative in under three minutes: Do it your way

A great starting point for your International Petroleum research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

Looking for more investment ideas?

Sharpen your portfolio by targeting exciting opportunities that others miss. These stock picks are on the move, and you’ll want to be ahead of the curve.

• Access annual income potential from market leaders by checking out these 19 dividend stocks with yields > 3%, which features consistently strong yields and enticing growth prospects.
• Power up your watchlist with breakthrough companies in artificial intelligence. Don’t miss out on what’s next by seeing these 24 AI penny stocks making headlines.
• Boost your edge with companies trading below their true worth, and review these 896 undervalued stocks based on cash flows to spot value opportunities others are overlooking.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com