June 20, 2019 / 12:14 PM / a year ago

BUZZ-Gran Tierra Energy: Canaccord says stock correction an opportunity to buy

** Canaccord Genuity cuts price target on Canadian oil and gas producer by C$2.50 to C$3.50, but maintains “buy” rating

** GTE on Wednesday flagged operational issues at some of its assets resulting in production being down ~9,000 barrels of oil equivalent per day (boe/d) during the last five days

** Following the news, stock fell to close 11.4% lower at C$1.70 on Wednesday

** Brokerage reduces 2019 production estimates to 36,700 boe/d from 40,300 boe/d but says stock has underperformed compared with peers and so, the “bad news” is already priced in

** Expecting production to be restored in H2 2019 - Brokerage

** Believe there is limited downside and significant potential upside for stock, once issues are resolved in coming months

** GTE has substantial resource base not reflected in current share price, underlying value could be realized through potential deal, making it an attractive acquisition target - Brokerage

** 4 of 6 brokerages rate the stock “buy” or higher, 2 “hold”; median PT is C$4.39

** Up to Wednesday’s close, stock down 21.6% this year (Reporting by Debroop Roy in Bengaluru)

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