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UTS, OPTI look good to RBC Add to ...

OPTI Canada and UTS Energy have both been upgraded by RBC Capital Markets analyst Mark Polak, although like most other energy stocks they are down sharply in Tuesday's market rout. In a note to clients Mr. Polak said he was boosting his price target for OPTI to $23 from $22 and boosting his recommendation to "outperform" from "sector perform." "OPTI is trading at a 20 per cent discount to our risked NAV estimate of $22.65 and a 46 per cent discount to our unrisked NAV estimate of $33.74," he said, adding that he thinks that at current oil prices, the market is "paying very little" for future phases of the company's planned development. As for oil sands player UTS, Mr. Polak promoted it to his "top pick" from "sector perform" and hiked his price target to $7.50 from $6. "This is due primarily to higher oil prices and the inclusion of a risked value for additional prospective resources," Mr. Polak said. "At its current share price, we do not believe the market is ascribing any value to resources beyond Fort Hills." What's more, he also thinks that the "strategic value" of the acreage UTS does hold outside Fort Hills makes the company "a compelling takeover target for a number of players, due to the scarcity of mining resources available and strong partner in Teck Cominco."

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