Canaccord Genuity lowers target price on Arrow Exploration
By Iain Gilbert
Date: Thursday 01 May 2025
(Sharecast News) - Analysts at Canaccord Genuity lowered their target price on Arrow Exploration from 32.0p to 28.0p on Thursday as it took a "more cautious approach" to the firm's production profile.
Canaccord Genuity said FY24 was "a bumper year" for Arrow, with production rising 63% and revenue up 65%. It also noted that while this growth required increased investment, year-end cash still rose from $12.1m to $18.8m.
The Canadian bank also said the upturn "really gained pace" in H224, with a step up in production at its Carrizales Norte asset following horizontal well drilling success, leading to Q424 production of 4,700 barrels of oil equivalent per day - double that of Q324.
Still, Canaccord took the more cautious approach to the production profile and said it had not included any production from Arrow's exploration targets until discoveries were made.
"As a result, we exclude potential new target development drilling from our capex profile. For 2026 and beyond, we currently assume a much lower capex programme with associated production declines. Exploration success and/or further intense development drilling could significantly change that profile," said Canaccord, which has a 'buy' rating on the stock.
"Our lowered production profile in combination with higher anticipated realised oil price discounts results in a reduced risked NPV12.5 target price of 28p (from 32p)."
Reporting by Iain Gilbert at Sharecast.com
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