MEG Energy Corp.

TSX:MEG Stock Report

Market Cap: CA$6.7b

MEG Energy Valuation

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

Valuation Score

4/6

Valuation Score 4/6

  • 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 MEG when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: MEG (CA$26.2) is trading below our estimate of fair value (CA$54.47)

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

Key Valuation Metric

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

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

The above table shows the Price to Earnings ratio for MEG. This is calculated by dividing MEG's market cap by their current earnings.
What is MEG's PE Ratio?
PE Ratio13.7x
EarningsCA$504.00m
Market CapCA$6.72b

Price to Earnings Ratio vs Peers

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

The above table shows the PE ratio for MEG vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average15.5x
PSK PrairieSky Royalty
31.9x2.1%CA$7.0b
WCP Whitecap Resources
6.9x-17.0%CA$5.9b
SCR Strathcona Resources
12.7x0.9%CA$6.1b
VRN Veren
10.4x11.1%CA$4.4b
MEG MEG Energy
13.7x-1.3%CA$6.7b

Price-To-Earnings vs Peers: MEG is good value based on its Price-To-Earnings Ratio (13.7x) compared to the peer average (15.5x).

Price to Earnings Ratio vs Industry

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

6 CompaniesPrice / EarningsEstimated GrowthMarket Cap
HAM Highwood Asset Management
1.6x-28.5%US$62.51m
ALPS.U Alpine Summit Energy Partners
1xn/aUS$24.02m
KUB.H Carcetti Capital
0.7xn/aUS$5.82m
GCOM Green Shift Commodities
1.4xn/aUS$4.41m
MEG 13.7xIndustry Avg. 10.5xNo. of Companies11PE0816243240+
6 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: MEG is expensive based on its Price-To-Earnings Ratio (13.7x) compared to the Canadian Oil and Gas industry average (10.7x).

Price to Earnings Ratio vs Fair Ratio

What is MEG'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.

MEG PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio13.7x
Fair PE Ratio11.3x

Price-To-Earnings vs Fair Ratio: MEG is expensive based on its Price-To-Earnings Ratio (13.7x) compared to the estimated Fair Price-To-Earnings Ratio (11.3x).

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 MEG forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentCA$26.20
CA$32.93
+25.7%
10.0%CA$38.00CA$26.00n/a15
Nov ’25CA$25.15
CA$32.90
+30.8%
10.1%CA$38.00CA$26.00n/a15
Oct ’25CA$26.37
CA$33.50
+27.0%
10.3%CA$38.00CA$26.00n/a15
Sep ’25CA$26.84
CA$34.63
+29.0%
8.4%CA$39.00CA$28.00n/a15
Aug ’25CA$27.91
CA$34.77
+24.6%
8.9%CA$40.00CA$28.00n/a15
Jul ’25CA$29.27
CA$34.87
+19.1%
8.9%CA$40.00CA$28.00n/a15
Jun ’25CA$29.59
CA$34.87
+17.8%
9.5%CA$40.00CA$28.00n/a15
May ’25CA$30.20
CA$34.86
+15.4%
9.7%CA$40.00CA$28.00n/a14
Apr ’25CA$31.48
CA$32.29
+2.6%
10.5%CA$37.00CA$26.00n/a14
Mar ’25CA$29.34
CA$31.04
+5.8%
10.2%CA$35.00CA$26.00n/a14
Feb ’25CA$24.47
CA$30.35
+24.0%
9.9%CA$35.00CA$26.00n/a13
Jan ’25CA$23.67
CA$30.50
+28.9%
8.3%CA$36.00CA$27.00n/a13
Dec ’24CA$25.48
CA$30.85
+21.1%
7.8%CA$36.00CA$27.00n/a13
Nov ’24CA$27.38
CA$30.58
+11.7%
7.7%CA$36.00CA$27.00CA$25.1513
Oct ’24CA$26.43
CA$27.77
+5.1%
10.4%CA$33.00CA$23.00CA$26.3713
Sep ’24CA$25.53
CA$26.50
+3.8%
8.7%CA$32.00CA$23.00CA$26.8413
Aug ’24CA$23.82
CA$26.08
+9.5%
9.0%CA$30.00CA$21.50CA$27.9113
Jul ’24CA$21.00
CA$25.58
+21.8%
8.9%CA$29.00CA$21.00CA$29.2713
Jun ’24CA$21.29
CA$25.88
+21.6%
10.2%CA$30.00CA$21.00CA$29.5913
May ’24CA$22.22
CA$26.12
+17.5%
10.8%CA$31.00CA$21.00CA$30.2013
Apr ’24CA$21.71
CA$24.85
+14.4%
9.8%CA$30.00CA$21.00CA$31.4813
Mar ’24CA$21.99
CA$24.31
+10.5%
12.5%CA$30.00CA$19.00CA$29.3413
Feb ’24CA$21.70
CA$23.57
+8.6%
16.0%CA$34.00CA$19.00CA$24.4714
Jan ’24CA$18.85
CA$24.00
+27.3%
15.8%CA$34.00CA$18.00CA$23.6714
Dec ’23CA$19.18
CA$24.14
+25.9%
14.8%CA$34.00CA$19.00CA$25.4814
Nov ’23CA$20.44
CA$23.21
+13.6%
17.0%CA$34.00CA$18.00CA$27.3814

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

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