Crius Energy Trust Tr Unit CRIUF

RE:RE:RE:RE:research note

[maypeters]

Some of the note is missing especially the target price: 

Afzaal wrote:

“We have revised our US:CAD exchange rate assumption to C$1.25 from C$1.30, which drives our target price to C$11.50/ sh (6.0x EV/2018 EBITDA unchanged) from C$12.00. While we continue to believe our target is achievable within 12 months, we expect the shares to trade sideways in the near term as Q3/17 consensus forecasts are potentially revised down, and due to the overhang created by expiry of the shares’ lock-up period. This may result in temporary weakness in the share price and provide a better entry point. Revising down Q3/17 EBITDA forecast from C$29M to C$19M; consensus at C$30M: Crius Energy is expected to report its Q3/17 results in November (exact date not yet released). The company generated C$21M in Adj. EBITDA in Q3/16.”

ronin1 wrote: Canaccord Genuity Industrial Technologies Analyst Raveel Afzaal has marginally downgraded his outlook on shares of Crius Energy after revising his US:CAD exchange rate assumption to $1.25 from $1.30. While he continues to believe his bullish target is achievable within 12 months, Afzaal expects the shares to trade sideways in the near term as Q3/17 consensus forecasts are potentially revised down, and due to the overhang created by expiry of the shares' lock-up period. This may result in temporary weakness in the share price and provide a better entry point. Afzaal has revising down Q3/17 EBITDA forecast from $29M to $19M; consensus at $30M: Crius Energy is expected to report its Q3/17 results in November (exact date not yet released). The company generated $21M in Adj. EBITDA in Q3/16. Afzaal believes mild weather can result in a $5-7M Y/Y EBITDA decline while gross margin compression can result in another $2-3M EBITDA decline. Afzaal expects USG&E to contribute ~$4-5M in Q3/17 (Q3 is seasonally weak due to its large natural gas portfolio). In the regards to the share lock-up, Afzaal expects 3.8M shares associated with the USG&E acquisition and another ~3.8M associated with the 2016 equity financing to come off lock-up during the Nov '17–Jan '18 time frame. At the end of the day, he says the attractive distribution yield and valuation multiple should provide support to the share price."