The Globe and Mail reports in its Wednesday, Aug. 10, edition that Scotia Capital analyst Kevin Fisk says the tax reform proposals from Colombia's new president, Gustavo Petro, could have "a meaningful negative impact" on Parex Resources' cash flow.
The Globe's David Leeder writes that Mr. Fisk says in a note: "President Petro's proposed tax reform includes a tax on oil exports and the elimination of royalty deductibility in the calculation of taxable income. Based on the information currently available, we estimate the proposed tax reform could have a 10- to 20-per-cent impact on net asset value (Scotia's price deck)."
While Mr. Fisk continues to like the company's management and exploration upside, he downgraded his recommendation for its shares to "sector perform" from "sector outperform" until tax reform clarity emerges.
His target for Parex shares remains $34. Analysts on average target the shares at $40.51. The Globe reported on June 2, 2021, and Sept. 3, 2021, that RBC rated Parex "outperform." It was then worth $21.84 and $21.15. The Globe reported on Nov. 5, 2021, that Stifel analyst Cody Kwong had reaffirmed his "buy" recommendation for Parex. The shares could then be had for $23.08.
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