June 27, 2019 / 10:57 AM / a year ago

BUZZ-Husky Energy: Compelling but on the sidelines due to execution risk - NBC

** National Bank of Canada initiates coverage on Canadian integrated oil co with “sector perform” and price target of C$16

** While full potential of integrated model is not realised due to Alberta’s mandated output curtailments, the reduced risk is still attractive for investors - NBC

** Says HSE has one of the cleanest balance sheets in the sector, which also gives it options for strategic acquisitions

** NBC, which does not expect free cash flow for HSE through 2020, says there will be robust FCF thereafter

** However, as HSE tries to deliver on its five-year plan, NBC sees execution risk on co’s ability to maintain safe and reliable operations along with disciplined capital allocation that would generate expected FCF

** 4 of 21 brokerages rate the stock “buy”, 12 “hold” and 5 “sell” or lower; median PT is C$16 - an upside of ~24% to stock’s closing price on Wednesday

** Up to Wednesday’s close, HSE shares had lost 8.7% this year (Reporting by Debroop Roy in Bengaluru)

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