Tourmaline Oil (TSX:TOU) Launches A 4% Buyback, Is The Stock Cheap?
Tourmaline Oil buyback and what it could mean for investors
Tourmaline Oil (TSX:TOU) has put a new share repurchase program in place, authorizing a normal course issuer bid for up to 15,544,068 shares, or about 4% of its outstanding stock.
The company plans to cancel all shares acquired under the bid, which is scheduled to run until no later than August 9, 2027. As of July 31, 2026, Tourmaline Oil reported 388,601,707 shares outstanding, so the buyback target is a relatively small portion of total equity.
See our latest analysis for Tourmaline Oil.
Tourmaline Oil’s share price return has softened recently, with the stock down 9.43% over 90 days and 2.02% year to date, although the 5 year total shareholder return of 171.55% shows a very different longer term picture.
If you are weighing Tourmaline Oil’s buyback against other opportunities in energy and infrastructure, it can help to scan companies exposed to grid upgrades and electrification using the 37 power grid technology and infrastructure stocks.
With Tourmaline Oil committing cash to buybacks after a softer share price patch and mixed recent earnings trends, investors may be asking whether the current valuation still offers enough upside potential to justify taking on the risks from here.
Most Popular Narrative: 15.8% Undervalued
The most followed narrative values Tourmaline Oil at CA$71.45 per share, compared with the last close at CA$60.15. That gap underpins a thesis that hinges heavily on future export capacity and efficiency gains.
Strategic build-out of low-cost, high-margin inventory in the Northeast BC Montney, with associated infrastructure owned by Tourmaline, positions the company for meaningful production growth to 850,000 BOE/d by early next decade, which, at flat pricing, will more than double annual free cash flow, supporting higher future dividend payments and potential buybacks.
Want to understand why this narrative supports a higher fair value for Tourmaline Oil? The core of the story is faster revenue growth, rising margins and a future earnings profile that leans on a richer profit multiple than today. Curious which specific cash flow and earnings assumptions sit behind that CA$71.45 figure? The full narrative lays out the numbers driving this valuation call.
Result: Fair Value of CA$71.45 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, the Tourmaline Oil story also leans on assumptions that could be challenged if natural gas prices stay weak or if export infrastructure faces regulatory or timing setbacks.
Find out about the key risks to this Tourmaline Oil narrative.
Another Take On Tourmaline Oil’s Valuation
While the narrative-led fair value for Tourmaline Oil points to the stock being 15.8% undervalued at CA$71.45, the preferred earnings multiple sends a different signal. The current P/E of 61.9x is much higher than the Canadian Oil and Gas industry at 21.1x and the peer average at 20.4x.
The fair ratio for Tourmaline Oil sits at 29.3x P/E, which is less than half of where the stock trades today. That gap suggests the market could move closer to the fair ratio if expectations cool, which may limit upside. Which version of fair value do you think tells the clearer story?
See what the numbers say about this price — find out in our valuation breakdown.
Next Steps
With mixed signals on Tourmaline Oil’s valuation, sentiment and future prospects, it makes sense to review the numbers yourself and move quickly to form your own view using the 1 key reward and 3 important warning signs.
Looking for more investment ideas beyond Tourmaline Oil?
If Tourmaline Oil has sharpened your focus on quality, use the Simply Wall St Screener to quickly spot other stocks that might fit your portfolio goals.
- Target higher potential value by reviewing companies that screen well on cash flow strength and pricing through the 13 high quality undervalued stocks.
- Strengthen income potential by checking out companies with robust yields and resilience using the 5 dividend fortresses.
- Prioritise capital protection by scanning for companies with resilient risk profiles via the 7 resilient stocks with low risk scores.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com