This Canadian energy stock trades at a steep discount to peers, Scotiabank says

Scotiabank upgraded Paramount Resources Ltd. (TSX:POU) to Sector Outperform from Sector Perform, raising its price target to C$42 from C$40. The new target implies 34% upside from the C$31.29 share price as of November 9.

The upgrade follows Paramount's sale of its Kaybob assets to Outwest Energy. Analyst Chris MacCulloch said the deal represents fair value for mature properties with high operating costs and abandonment obligations. Paramount retains a 49% equity interest in the assets through Outwest.

The transaction frees capital for development of Alhambra Phase 3 and the Hoole project, Scotiabank said, giving the company a clearer growth path.

Paramount trades at 4.5 times its 2028 estimated debt-adjusted cash flow, compared with 6.3 times for Canadian energy peers. Scotiabank forecasts 24% compound annual growth in debt- and dividend-adjusted per-share value between 2027 and 2030, above the 11.6% projected for Canadian peers.

Scotiabank also raised its net asset value estimate to C$45.29 per share from C$42.05.