LONDON (ShareCast) - (Sharecast News) - Analysts at Canaccord Genuity slightly lowered their target price on energy company Vaalco from 715.0p to 700.0p on Tuesday as it made "a number of small adjustments" to its model.
Canaccord Genuity said Vaalco's full-year guidance demonstrated the increased production expected from its upscaled asset base, as well as benefits stemming from its recent drilling programme on the Etame licence offshore Gabon.

The Canadian bank stated Vaalco's more diverse asset base, together with reduced unit costs in Gabon, growth potential across the portfolio, continued balance sheet strength, and shareholder returns, plus the continued market discount to the stock's "fair" value, presented "a highly appealing investment opportunity".

"After such a busy year of operational and corporate activity we expect 2023 to be a little quieter externally, but the pace internally is unlikely to let up," said the analysts, who reiterated their 'buy' rating on the stock.

Canaccord thinks that the group's "broader, better balanced production base", with long-term growth potential across all four countries of operation, more than offsets the "small reduction" in its valuation.

"Furthermore, with the FSO now successfully installed at Etame, the infrastructure risks there have declined significantly. Overall, in our view, compared with 12 months ago, Vaalco is a much more attractive - larger and lower risk - investment," said Canaccord.





Reporting by Iain Gilbert at Sharecast.com

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