By Adriano Marchese

NuVista Energy shares fell after National Bank of Canada analyst said peers offer better valuation.

Shares traded 2.1% lower at 12.50 Canadian dollars ($8.65).

National Bank of Canada analyst Dan Payne said the downgrade to sector perform from outperform was "largely a valuation call under the prevailing forecasts, as the stock has proven strong performance."

Payne thinks that while the long-term outcome to value on the stock remains solid, with the backstop of recent peer consolidation at a multiple of 5.5 times price-to-cash-flow range, near-term value assessment suggests 25% upside to current trading compared with its peers at 35%.

"As such, we are downgrading to a neutral stance as a function of valuation, with its in-line return proposition largely supported by its prevailing multiple," he said.

On Wednesday, NuVista Energy said it expects lower fourth-quarter output due to an unplanned maintenance stoppage at a third-party gas plant.

The Calgary, Alberta-based energy company downgraded its production targets to be between 83,000 and 84,000 barrels of oil equivalent a day, down from a previous expectation of 89,000 to 91,000 barrels a day.

Analysts had expected production of 88,600 barrels a day for the quarter, according to FactSet.

Payne said the company still has long-term potential, which could invite a change in rating in the future.

"As the company executes its capital budget, we expect to proactively orient towards prospective growth catalysts and value dislocations for future outperformance," he said.

Write to Adriano Marchese at adriano.marchese@wsj.com

(END) Dow Jones Newswires

December 19, 2024 10:39 ET (15:39 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.