International Petroleum (TSX:IPCO) has just wrapped up its annual share buyback, canceling roughly 6% of its outstanding shares. The company now plans to renew its program for another year, subject to TSX approval.
See our latest analysis for International Petroleum.
Alongside its sizable buyback, International Petroleum just wrapped up a USD 450 million bond issue to refinance existing debt, indicating a disciplined approach to capital management. Although the 1-year total shareholder return stands at a modest 0.34%, the company’s 3- and 5-year totals of 0.91% and 8.95% suggest that long-term momentum remains steady. Recent moves hint at a push for future growth.
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After a year of steady gains and robust capital actions, the question now is whether International Petroleum shares are still trading at an attractive value or if the market has already factored in the company’s potential for future growth.
With International Petroleum’s fair value according to the most-followed narrative at CA$25.17, and a last close of CA$23.57, there is a narrow value gap that sets up a debate: does the current price reflect all the growth on the horizon?
The imminent completion and ramp-up of Blackrod Phase 1 is expected to significantly increase long-life, low-cost production, materially improving operating cash flow and free cash flow from late 2026 onwards, supporting future revenue and earnings growth.
Want to know what powers this bullish outlook? There is a crucial set of forecasts about rapidly rising margins and a re-rating of expected profits. These projections, hidden just beneath the headlines, are key to the narrative’s price target. Are the underlying numbers as compelling as the story itself? Click to discover what is driving the narrative’s value and what might surprise you.
Result: Fair Value of $25.17 (UNDERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, setbacks in Blackrod’s ramp-up or unexpected cost overruns could rapidly shift this outlook and reduce the company’s future momentum.
Find out about the key risks to this International Petroleum narrative.
While the most-followed narrative points to undervaluation, conventional market multiples offer a different picture. International Petroleum’s price-to-earnings ratio sits at 35.5x, much higher than both its peer average (16.7x) and the industry’s average (12.3x). The fair ratio is 18.9x, which suggests the market could correct downward toward this level. Does this premium signal confidence in outsized future growth, or does it set expectations that are tough to meet?
