OTCPK:CSUWF - Post Discussion
Post by
retiredcf on Feb 06, 2018 1:14pm
RBC
Outperform ($26 one-year price target)
Fourth-quarter earnings and ACFFO (release date: TBA)
We expect Enercare’s Q4/17 EBITDA to slightly increase to $77 million (from $73 million in Q4/16), attributable to stronger rental revenue, offset by slightly higher corporate costs. We estimate Q4/17 ACFFO/share (diluted) to increase to $0.42 (from $0.20 in Q4/16) primarily due to lower maintenance capex and lower cash taxes. Please note that we have changed how we define maintenance capex (allocated all HVAC capex into growth capex) starting in 2017 as water heater attrition continued to improve. If we allocated all HVAC capex to growth capex in Q4/16, ACFFO/share (diluted) would have been $0.33.
We expect Enercare to announce a 4% dividend increase (consistent with the size and timing of previous increase) with its Q4/17 results. We believe investors will focus on the contribution from Service Experts, updates on the roll-out of rentals (and rental mix) within the Service Experts business, and additional colour on potential tuck-ins.
The FactSet mean EBITDA estimate for Q4/17 is $78 million (four estimates ranging from $77 million to $80 million).
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