IAE.v rated Buy at Octagon w/ C$7.50 target based on 2011 estimated cash flow:
(copied from StockHouse note)
From Octagon:
Today’s announcement that Ithaca’s share of Athena’s production will initially be 4,950 bd by the end of Q2/11 dramatically improves the outlook for the Company.
Generally, the market begins to price stocks on the one-year cash flow outlook. Within a few months, the impact of the 2011 mid-year production additions should be reflected in the stock
price, and by year-end the market could be keying on exit 2011 estimates.
Clearly, there is substantial value creation potential for investors in Ithaca. High-growth stocks with a strong balance sheet frequently trade in excess of a 5x multiple of cash flow; based on the exit projections for 2011, this implies a stock price of over $7.50.
We maintain our BUY recommendation with a target price of $3.00 for the short term.
Crab Nebula:
