Vermilion Energy (TSX:VET) Launches A Sizeable Buyback, Is The Stock A Bargain?
Vermilion Energy launches sizeable buyback program
Vermilion Energy (TSX:VET) has announced a normal course issuer bid to repurchase up to 15,157,179 shares, or 9.91% of its issued share capital, with all repurchased shares set to be cancelled.
The buyback, which may run until no later than July 11, 2027, applies to a current share count of 152,948,362 as of June 30, 2026. It signals a clear focus on reducing the share base.
See our latest analysis for Vermilion Energy.
Vermilion Energy's buyback news lands after a mixed price pattern, with the CA$14.40 share price up 4.96% on a 1 day basis and the 1 year total shareholder return at 35.88%, while the 3 year total shareholder return shows a decline of 9.45%.
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Vermilion Energy is committing cash to buy back nearly 10% of its stock, which tightens the share count today but also raises a practical question for you as an investor: is the current CA$14.40 price already attractive, or is it worth waiting for a better entry before that program runs its course?
Most Popular Narrative: 35.1% Undervalued
At a last close of CA$14.40, the most followed narrative for Vermilion Energy points to fair value of CA$22.20, which implies a sizeable valuation gap based on long term cash flow expectations.
Vermilion's discovery and development of German deep gas exploration wells, particularly with successful wells like Wisselshorst, are expected to more than double current European 2P gas reserves. This could significantly boost revenue and increase earnings over the coming years through higher production and premium European gas prices.
Want to see what is baked into that CA$22.20 fair value for Vermilion Energy? The narrative leans heavily on future cash generation, rising margins, and a different earnings multiple than the market is using today.
Result: Fair Value of CA$22.20 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, Vermilion Energy still faces execution risk around integrating Westbrick and relies heavily on higher margin gas projects in Europe actually delivering as planned.
Find out about the key risks to this Vermilion Energy narrative.
Next Steps
With Vermilion Energy attracting both concern and optimism, this is a moment to move quickly, review the numbers in detail, and weigh the 3 key rewards and 2 important warning signs.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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