Parex Resources (TSX:PXT): Exploring Valuation After Q3 Earnings Reveal Lower Profits but Strong Production Outlook

Parex Resources (TSX:PXT) just reported its third quarter earnings, revealing that both revenue and net income dropped compared to last year. However, the company maintained its production guidance for the remainder of 2025.

See our latest analysis for Parex Resources.

Despite a dip in quarterly earnings, Parex Resources has maintained upbeat production guidance while announcing another regular dividend and updating on its recent buyback, giving investors plenty to digest. The stock’s momentum remains strong, with a 90-day share price return of 15.1%, and its total shareholder return over the past year stands at an impressive 46%, which points to solid long-term performance as confidence builds around its outlook.

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With the stock climbing over the past year while earnings have softened, the key question for investors is whether Parex Resources remains undervalued or if the market is already factoring in its growth prospects and stability.

Most Popular Narrative: 7% Undervalued

Compared to the last close at CA$18.45, the most popular narrative suggests Parex Resources has more upside, with a fair value pegged at CA$19.83. This perspective sets the standard for how analysts currently view the company's risk, growth, and operational outlook.

The company is rapidly expanding production capacity through successful development drilling, secondary recovery (EOR), and near-field exploration across its core Colombian assets. This positions it to capitalize on persistent global energy demand growth and potential oil supply tightness, which should drive revenue and free funds flow growth as production volumes rise.

Read the complete narrative.

What’s really driving that valuation? It’s not just about oil prices or headlines. The narrative is powered by bold future projections for profitability, efficiency, and strategic expansion. These numbers and targets might surprise even seasoned investors. Ready to see the financial engine behind the outlook?

Result: Fair Value of $19.83 (UNDERVALUED)

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

However, a shift in Colombian regulations or a slowdown in production growth could challenge Parex's current positive outlook and have an effect on future returns.

Find out about the key risks to this Parex Resources narrative.

Build Your Own Parex Resources Narrative

Keep in mind, if you have your own perspective or want to dive into the numbers firsthand, you can create a personalized view in just a few minutes, your way. Do it your way

A great starting point for your Parex Resources research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

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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.

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