11:30 AM EDT, 08/19/2024 (MT Newswires) -- UBS on Monday reiterated its neutral rating on the shares of Tourmaline Oil (TOU.TO) with a C$77.00 price target after the Western Canadian natural-gas producer agreed to acquire rival Crew Energy ( CWEGF ) for C$1.3 billion.

"We update our estimates and reiterate our $77 PT post the Crew Energy ( CWEGF ) acquisition announced this week. On the positive side, we see the C$1.3Bn transaction as accretive to FY25/26 CFPS, adds liquids rich production, and acquires an asset with built in growth potential. Additionally, TOU maintains its balance sheet strength and increased the base dividend again from $0.33/sh to $0.35/sh. The pushback to the transaction has been the 70% premium paid for a stock trading at a 52-week low vs. recent all-stock E&P transactions in the 15% range. We see TOU's 3Q call as the next key event as they update the 5-year EP plan, with development plans for the Groundbirch assets and CR integration expected," the investment bank noted.

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Price: 63.59, Change: +0.64, Percent Change: +1.02