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Investing.com - National Bank Financial has initiated coverage on InPlay Oil Corp (TSX:IPO) (OTC:IPOOF) with an Outperform rating and a price target of C$16.00, representing potential upside of 50% from current levels. The stock has already demonstrated strong momentum, with a 39% gain over the past six months. According to InvestingPro analysis, the company appears undervalued based on its Fair Value metrics.
The rating is based on InPlay’s consolidated position in the Cardium formation, which National Bank Financial believes provides asset synergies and operating leverage that support strong free cash flow sustainability.
National Bank Financial highlighted InPlay’s attractive 10% cash yield and ongoing deleveraging as factors contributing to optimal shareholder value creation.
The C$16.00 target price is based on a 3.0x 2026 target price multiple, which is below the peer average of 4.0x, while the company is poised for a 32% total return compared to the peer average of 13%.
InPlay currently trades at 2.4x 2026 EV/DACF versus the peer average of 3.4x, with leverage of 0.7x D/CF that is in line with peers, according to National Bank Financial’s analysis. The company’s current EV/EBITDA ratio stands at 6.04x, with a price-to-book ratio of 0.82x, suggesting potential value opportunity despite operational challenges.
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