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Imperial Oil Ltd IMO

Morningstar’s Analysis

Valuation
Currency in USD

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Increasing Our Imperial Oil Fair Value Estimate

Analyst Note

| Dave Meats, CFA |

We are increasing our fair value estimate for no-moat Imperial Oil to $25/CAD 32 from $24/CAD 30. Our higher fair value estimate is driven by increased near-term commodity price forecasts. We are also maintaining our no-moat rating. The stock is trading near $22/CAD 28, which implies only modest upside to our fair value estimate. Imperial also offers a 3.2% dividend yield, but this lags Canadian Natural Resources. We see better opportunities in the Canadian energy sector, specifically Enbridge, Cenovus Energy, and Canadian Natural. We think the market is appropriately recognizing Imperial’s growth potential and strong balance sheet.

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Company Profile

Business Description

Imperial Oil is one of Canada’s largest integrated oil companies, focusing on upstream operations, petroleum refining operations, and the marketing of petroleum products. Production averaged 398 thousand barrels of oil equivalent per day in 2020. The company estimates that it holds 5.2 billion boe of proved and probable crude oil and natural gas reserves. Imperial remains the largest refiner of petroleum products in Canada, operating three refineries with a combined processing capacity of 421 mboe/d.

Contact
505 Quarry Park Boulevard S.E
Calgary, AB, T2C 5N1, Canada
T +1 587 476-3740
Sector Energy
Industry Oil & Gas Integrated
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2019
Stock Type
Employees 5,800

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