TSX:CHE.DB.E - Post by User
Comment by
Aurum1983on Jul 26, 2023 1:45pm
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Post# 35558056
RE:RE:Why rising?
RE:RE:Why rising?Scotia research from Jun 26/23:
OUR TAKE: Positive. We expect to see a relief rally in CHE near-term, as investors should applaud management’s decision to place the Casa Grade JV on hold. Why? Simply put, the math no longer worked, as soaring capex put both project returns and B/S leverage into question. Separately, the Cairo, OH project remains on time/budget, while better-than-expected chlor-alkali economics should see the Street raising ‘23 EBITDA estimates by 5% to 7%.
A 25% rally is expected at a conservative 5.5x PE. That would take us above $10. And not to mention the balance sheet and forecast continue to improve. 10x PE would take us above $12. This would actually be consistent with the TP estimate in the last 3 months ranging from $11 to $13 with an average of $12.17.
This is extremely undervalue even without the dividend. I shouldn't even be commenting here as I am still trying to buy more.