Precision Drilling (PD.TO)

Experts have a positive outlook on Precision Drilling (PD-T) as they believe the activity in the oil space is on the rise, suggesting a price increase of 5-10% leading into 2027. The company's performance is recognized, especially as it gears towards pure play oil production, which is expected to see the most significant price appreciation. A notable rally is also influenced by developments such as the sanctioning of LNG Canada for the upcoming year. With a focus on returning 50% of capital to shareholders after meeting debt targets, the company is showcasing attractive financial health with a 20% free cash flow yield projected for next year. Although the spreadsheet assessments point towards positive math, experts express caution about the current market timing, with services stocks potentially getting an upswing when trading at high multiples. Nonetheless, there is good leverage to US natural gas markets, which enhances growth opportunities as demand within the US is expected to rise.