On Tuesday, RBC Capital raised its outlook for PrairieSky Royalty Ltd (PSK:CN) (OTC: PREKF), upgrading the stock from Sector Perform to Outperform and increasing the price target to C$33.00 from C$31.00. The firm cited a more positive view on the company's future multi-lateral drilling prospects as the reason for the upgrade.
The improved rating reflects RBC Capital's expectation of higher implied returns for PrairieSky Royalty, a sentiment bolstered by the company's potential drilling activities.
The firm acknowledges the company's current high valuation but emphasizes the quality of PrairieSky's asset portfolio as a critical factor for long-term value creation.
RBC Capital's updated price target suggests confidence in PrairieSky's ability to capitalize on its drilling prospects. The firm's outlook points to a robust set of assets that are considered top-tier within the industry, which could drive the company's performance going forward.
PrairieSky Royalty, known for its ownership of extensive mineral fee title lands in Western Canada, allows other companies to develop these resources while collecting royalty revenues. The company's business model, which involves less operational risk and capital expenditure, is seen as an attractive investment by RBC Capital.
The upgrade by RBC Capital comes as a positive note for PrairieSky Royalty and its investors, signaling potential growth and profitability linked to its drilling prospects. The new price target of C$33.00 represents RBC Capital's confidence in the company's strategic direction and asset strength.
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