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Peyto Exploration & Dev
(TSX:PEY)
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Rating:73Outperform
Price Target:
C$27.00
▲(9.58% Upside)
Action:Reiterated
Date:08/17/26
The score is driven primarily by strong financial performance (high margins, solid operating cash flow/free cash flow, and improving leverage) and supportive valuation (low P/E with a high dividend yield). Offsetting these positives are mixed/soft technical signals (price below key short-term moving averages and subdued momentum) and earnings-call risks tied to weaker forward gas pricing and potential volatility from accounting and market exposure, despite hedging and guidance reaffirmation.
Positive Factors
Strong profitability and cash generation
High margins and substantial operating cash flow indicate an efficient upstream model with strong internal funding capacity. This supports ongoing drilling, debt reduction and shareholder distributions, although cash conversion remains dependent on commodity conditions and reinvestment needs.
Negative Factors
Structural commodity-price exposure
Peyto remains an upstream producer whose revenue and earnings depend heavily on natural-gas and liquids prices. Historical revenue volatility shows that hedging cannot eliminate cycle risk, leaving profitability and development returns exposed to prolonged weak pricing.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong profitability and cash generation
High margins and substantial operating cash flow indicate an efficient upstream model with strong internal funding capacity. This supports ongoing drilling, debt reduction and shareholder distributions, although cash conversion remains dependent on commodity conditions and reinvestment needs.
Read all positive factors
Peyto Exploration & Dev (PEY) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$5.01B
Dividend Yield5.59%
Average Volume (3M)562.34K
Price to Earnings (P/E)10.0
Beta (1Y)0.17
Revenue Growth26.11%
EPS Growth45.27%
CountryCA
Employees87
SectorEnergy
Sector Strength52
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)2.43
Shares Outstanding205,926,440
10 Day Avg. Volume518,721
30 Day Avg. Volume562,337
Financial Highlights & Ratios
PEG Ratio0.24
Price to Book (P/B)1.60
Price to Sales (P/S)4.13
P/FCF Ratio11.87
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$27.70Price Target Upside12.42% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
EPS Forecast (FY)2.41
Revenue Forecast (FY)C$1.49B
Peyto Exploration & Dev Business Overview & Revenue Model
Company Description
Peyto Exploration & Development Corp., together with its subsidiaries, engages in the exploration, development, and production of natural gas, and oil and natural gas liquids in Alberta’s deep basin. The company was formerly known as Peyto Energy ...
How the Company Makes Money
Peyto primarily makes money by producing and selling hydrocarbons—mainly natural gas and, to a lesser extent, NGLs (e.g., propane, butane, condensate) and crude oil—into wholesale energy markets. Revenue is generated based on the volumes produced ...
Peyto Exploration & Dev Earnings Call Summary
Earnings Call Date:Aug 11, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 09, 2026
Earnings Call Sentiment Positive
The call presented a largely positive operating and financial performance: strong funds from operations ($228M), high operating margin (71%), restored low-cost structure ($1.04/Mcfe), meaningful drilling and completion cost improvements (37% per-meter in Brazeau; ~10% drill-side reduction in Sundance), increased liquids recovery (corporate liquids up 1 percentage point), accretive land additions, and increased dividend plus $72M net debt paydown. Key cautions include weaker forward gas strip prices, accounting-driven earnings volatility from the Centrica TTF embedded derivative (necessitating an 'adjusted earnings' metric), and some downstream market exposure in 2027–2028. Overall, highlights materially outweigh the lowlights, though management remains prudently cautious on capital allocation due to market uncertainty.Positive Updates
Maintained Production Despite Weather Disruption
Production held largely flat in Q2 despite a wet spring and reduced field activity, driven by a strong Q1 drilling program and efficient turnarounds (only ~500 BOE/day combined lost during Q2 turnarounds).
Negative Updates
Spring Breakup Reduced Q2 Field Activity
Drilling activity slowed during spring breakup — only 10 wells were spud in Q2 and well-related capital spend was modest at $68 million (some completions spilled over from Q1).
Read all updates
Q2-2026 Updates
Positive
Negative
Maintained Production Despite Weather Disruption
Production held largely flat in Q2 despite a wet spring and reduced field activity, driven by a strong Q1 drilling program and efficient turnarounds (only ~500 BOE/day combined lost during Q2 turnarounds).
Read all positive updates
Company Guidance
Peyto reaffirmed 2026 guidance of $450–$500 million of capital spending and drilling 70–80 net wells while running four rigs for the remainder of the year and shifting activity toward more liquid‑rich Cardium and Falher targets. The company said it is “well protected” with just over 500 MMcf/d hedged at >$4/Mcf for the rest of 2026 and roughly 400 MMcf/d secured for 2027 at about $3.30/Mcf, and it has ~400 MMcf/d of non‑AECO diversified volumes contracted for 2028+, including a Centrica supply agreement (50,000 MMBtu at NIT starting in 2029). Combined gas and liquids hedges and contracts secure roughly $485 million of revenue for the remainder of 2026 and about $590 million for 2027; management emphasized the program is supported by low controllable cash costs ($1.04/Mcfe) and a 71% operating margin.Peyto Exploration & Dev Financial Statement Overview
Summary
Income Statement
82
Very Positive
Balance Sheet
74
Positive
Cash Flow
78
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.24B | 1.10B | 908.25M | 1.01B | 1.63B | 911.98M |
| Gross Profit | 721.97M | 649.27M | 421.22M | 595.15M | 1.07B | 575.60M |
| EBITDA | 1.06B | 994.64M | 836.96M | 758.26M | 866.71M | 513.73M |
| Net Income | 493.99M | 418.59M | 280.57M | 292.63M | 390.66M | 152.25M |
Balance Sheet | ||||||
| Total Assets | 5.54B | 5.46B | 5.51B | 5.51B | 4.01B | 3.78B |
| Cash, Cash Equivalents and Short-Term Investments | 62.98M | 51.06M | 13.63M | 37.18M | 11.90M | 5.72M |
| Total Debt | 1.06B | 1.18B | 1.36B | 1.40B | 864.52M | 1.07B |
| Total Liabilities | 2.49B | 2.61B | 2.81B | 2.79B | 1.95B | 2.02B |
| Stockholders Equity | 3.04B | 2.85B | 2.70B | 2.71B | 2.06B | 1.77B |
Cash Flow | ||||||
| Free Cash Flow | 457.09M | 384.13M | 215.49M | 233.84M | 304.92M | 92.82M |
| Operating Cash Flow | 958.74M | 857.48M | 672.36M | 644.87M | 811.78M | 457.87M |
| Investing Cash Flow | -502.16M | -452.45M | -432.24M | -1.15B | -516.91M | -351.43M |
| Financing Cash Flow | -425.29M | -367.60M | -263.66M | 527.27M | -288.68M | -110.03M |
Peyto Exploration & Dev Technical Analysis
Negative
24.64
Price Trends
24.74
Negative
24.78
Negative
24.37
Negative
Market Momentum
0.01
Positive
40.30
Neutral
10.99
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:PEY, the sentiment is Negative. The current price of 24.64 is below the 20-day moving average (MA) of 24.95, below the 50-day MA of 24.74, and above the 200-day MA of 24.37, indicating a bearish trend. The MACD of 0.01 indicates Positive momentum. The RSI at 40.30 is Neutral, neither overbought nor oversold. The STOCH value of 10.99 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:PEY.
Peyto Exploration & Dev Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | C$5.01B | 10.00 | 16.96% | 5.59% | 26.11% | 45.27% | |
70 Outperform | C$5.26B | 23.02 | 12.57% | ― | -6.76% | -46.80% | |
67 Neutral | C$4.87B | -7.59 | -26.39% | 1.30% | -8.89% | ― | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
62 Neutral | C$4.67B | 39.42 | 4.30% | 1.88% | -28.28% | -92.06% | |
62 Neutral | C$6.30B | 185.36 | 1.34% | 1.28% | 7.64% | -86.01% |
* Energy Sector Average
TSE:PEY
Peyto Exploration & Dev
24.31
7.37
43.52%
TSE:BTE
Baytex Energy
6.96
3.73
115.68%
TSE:ATH
Athabasca Oil
10.87
4.46
69.58%
TSE:POU
Paramount Resources
31.96
12.48
64.07%
TSE:TVE
Tamarack Valley Energy
13.29
7.64
135.26%
Peyto Exploration & Dev Corporate Events
Business Operations and StrategyDividends
Peyto Confirms August 2026 Monthly Dividend and Highlights Investor Disclosure
Positive
Aug 14, 2026
Peyto Exploration Development Corp. is a Calgary-based energy company listed on the Toronto Stock Exchange that focuses on natural gas exploration and development in North America. It positions itself as one of the region’s more dynamic ene...
Business Operations and StrategyDividendsFinancial Disclosures
Peyto Boosts Q2 Output, Cash Flow and Diversifies Gas Sales With Long‑Term Deal
Positive
Aug 11, 2026
Peyto reported a strong second quarter of 2026, with production rising 10% year over year to 145,320 boe/d and funds from operations climbing to $227.7 million, supported by industry-leading low cash costs and improved realized gas prices. Despite...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.