On Monday, Raymond James initiated coverage on Computer Modelling Group Ltd. (CMG:CN) (OTC: CMDXF), assigning the stock an Outperform rating and establishing a price target of Cdn$15.00.
The firm recognizes the increasing complexity in hydrocarbon production due to the shale revolution and identifies a growing dependency within the oil and gas industry on software and automation to manage this complexity.
The industry's emphasis on efficiency and cost reduction in the face of volatile commodity prices has led to a greater reliance on software simulations to optimize production. Computer Modelling Group, with its solid brand recognition and over 40 years of experience in reservoir simulation software, is considered well-positioned in this evolving market.
The firm notes that the unconventional oil and gas market, where CMG has a significant presence, is increasingly turning to technological solutions like those offered by Computer Modelling Group. This shift towards advanced simulations is in response to the sector's efforts to gain control over variables amidst the fluctuating prices of commodities.
Computer Modelling Group's expertise and long-standing reputation in the industry are highlighted as key factors in its favor. The company's focus on delivering simulation software that caters to the specific needs of the unconventional oil and gas sector is seen as a strategic advantage.
In summary, Raymond James' initiation of coverage on Computer Modelling Group with an Outperform rating and a price target of Cdn$15.00 reflects confidence in the company's ability to lead and benefit from the industry's transition towards more sophisticated and efficient production methods.
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