CFW: 1Q26 – Margin progress

Research evidence excerpt

CFW: 1Q26 – Margin progress

Calfrac Well Services Ltd.

Target/Upside/Downside Scenarios Investment summary

North American frac market stability. We expect 2026 activeCalfrac Well Services Ltd.

equipment utilization to remain stable in Canada, while US

9 125 Weeks 20DEC23 - 12MAY26 providers have recently signaled increasing utilization for

TARGETTARGET 8.008.00 8 2026.

6 CURRENTCURRENT 5.565.56 International bifurcation. The high-impact Vaca Muerta shale

5 play in Argentina, particularly, provides strong leverage to

3 upcycles in pressure pumping demand.

1 Potential catalysts

8m • Improved industry horsepower supply/demand balance.

6m 4m Increased absorption of available frac horsepower due

2m

2024 2025 2026 to: 1) Growing service intensity and attrition of the

D J F M A M J J A S O N D J F M A M J J A S O N D J

CFW CN Rel. S&P/TSX COMP IDX MA 40 weeks F M A M existing industry fleet; 2) Stronger-than-forecast recovery

Source: Bloomberg and RBC Capital Markets estimates for Target in commodity prices; 3) Growth in international markets,

particularly Vaca Muerta shale in Argentina.Valuation

Our $8.00 price target is based on a 3.5x multiple of our Risks to rating and price target2027E EBITDA of $270MM. Our price target supports a Sector • Reductions in industry activity. Oversupply of fracPerform, Speculative Risk rating. We assign a Speculative Risk equipment in North America may keep a lid on pricing andqualifier to our rating of Calfrac shares based on current returns on capital.financial leverage levels. • Speculative Risk. We assign a Speculative Risk qualifier

to our rating of Calfrac shares based on current financialUpside scenario

leverage levels.In our $10.00 upside scenario, we apply a 3.5x multiple

to 2027E EBITDA of $297MM. We assume EBITDA increases