Upgrade National Bank analyst Maxim Sytchev upgraded Bird Construction Inc. (BDT-T) shares to “outperform” while raising his price target to C$11.50 from $10.
He cited eight reasons why investors should buy the stock.
“1) Inaugural Investor Day on 9/9 — don’t expect many numeric targets but greater colour on strategy, positioning, Stuart Olson; 2) LNG Canada is a big project for the company — don’t expect a cliff as contract visibility should lead to profitability (2nd train would be icing on the cake) — recall % of Industrial work correlates positively to margins; 3) Greater emphasis on centralization, best practices sharing, technology are yielding benefits vs. previous localized management style; 4) Underlevered balance sheet (0.5x net debt) can provide M&A optionality as management would like to do 1 deal/year; 5) Oil is on the upswing — 40% of legacy Stuart Olson was commodity-driven; 6) Growth end markets such as nuclear, modular and timber are emerging, and they don’t carry higher risk; 7) Trading at 14% discount vs. own 5-year median while having a better end-market skew; 8) 4.2% dividend is attractive vs. CAD 10-year bond yield~1.2%.”