Imperial Oil downgraded to Underweight from Neutral at JPMorgan

JPMorgan analyst John Royall downgraded Imperial Oil to Underweight from Neutral with a C$76 price target. The company’s 2022’s free cash flow has been bolstered by low cash taxes as Canadian estimated taxes are paid based on the prior year’s earnings, Royall tells investors in a research note. Next year, Imperial will incur a catch-up of $2.5B and will pay ongoing taxes more in line with current cash flows, "which will either limit the next SIB somewhat or result in higher leverage," says the analyst. He thinks the company’s "return of capital story" will inflect downwards next year.