Mackie Research Capital analyst Raveel Afzaal says his discussions with clients suggest a high correlation between anomalies detected by NXT Energy's Stress Field Detector (\u201cSFD\u201d) technology and seismic surveys. NXT Energy's (NXT Energy Stock Quote, Chart, News: TSXV:SFD) securing of its largest contract ever is a "significant valuation catalyst", say Mackie Research Capital analyst Raveel Afzaal. This morning, NXT Energy reported that it had been awarded a contract worth more than (U.S.) $13-million to conduct an aerial Stress Field Detection survey project for a yet-to-be-named client. "This contract award with another new client validates NXT's strategy of focusing on clients that seek to use SFD to identify long-term strategic reserves efficiently at low relative cost," said CEO George Liszicasz. Afzaal says he believes NXT is making significant progress that is proving out the value of its survey data in the eyes of the third parties. The analyst says he believes the company's Stress Field Detector (SFD) technology is promising because it can help to optimize expensive exploration programs. He says his discussions with clients suggest a high correlation between anomalies detected by SFD and seismic surveys. In a research update to clients this morning, Afzaal maintained his "Buy" rating on NXT Energy, but raised his one year target from $1.90 to $2.50, implying a return of 39% at the time of publication. The analyst explained the rationale behind his price target raise. "We have left our 2016 revenue estimate unchanged but have increased our gross margin assumption from approximately 65% to 75%," said Afzaal. The revisions to our gross margin assumption result in our target price increasing to $2.50\/sh from $1.90\/sh. Admittedly, it is difficult to accurately forecast the Company\u2019s top line as it is challenging to forecast the timing of future contracts. Therefore, in order to be conservative, we continue to use 11.5x P\/E multiple to derive our target price. Based on our case studies, we note that it is not uncommon for O&G technology companies to trade between 20.0x to 30.0x P\/E multiples."