Husky Energy (OTCPK:HUSKF -2.7%) continues to spiral lower after at least three firms – Canaccord Genuity, Raymond James and Bank of Nova Scotia – downgraded the stock this week on free cash flow concerns.
“The mandatory curtailments from the Alberta government limit Husky’s ability to grow its Alberta-based production and also squeeze downstream margin,” Canaccord’s Deenis Fong said in cutting the stock to Sell from Hold with a C$10 price target.
“Given the inflexibility in the capital program and the already slowed pace of development of its thermal projects and its Indonesian assets, we believe that free cash flow will be relatively muted in 2020 and to a lesser degree in 2021,” Fong wrote.
“Our revised forecasts point to negative free cash flow for both 2020 and 2021,” Raymond James analyst Chris Cox said as he reduced his recommendation to Underperform from Market perform and maintained a C$11 price target.
HUSKF’s average Sell Side Rating, Seeking Alpha Authors’ Rating and Quant Rating all are Neutral.