(Idea) Journey Energy - Improving Fundamentals Will Propel Shares Higher
Editor’s Note: Ideas from HFI Research is a separate subscription from HFI Research. Journey Energy is currently not a holding in the HFI Research portfolio.
By: Jon Costello
Note to readers: Dollar values in Canadian dollars unless otherwise specified.
A bull/bear battle has been brewing over Journey Energy for the better part of a year. So far, the bears have been firmly in control, as Journey’s stock was one of the worst-performing E&Ps in 2024. The stock fell 51% during the year, falling far short of its smaller Canadian E&P peers and badly underperforming the XEG (XEG:CA) index, which ended the year up 11%.
In recent quarters, Journey’s poor financial performance put the bear thesis in play. However, at its current stock price of $2.15, its shares reflect none of its long-term potential, which we believe is considerable if oil prices rise. For all the company’s recent missteps, we believe its shares currently offer one of the best risk/return propositions in the North American oil patch. As its fundamental performance improves, we expect its stock price to follow suit.