Stifel RaisesStifel’s Ian Gillies increased his Doman Building Materials Group Ltd. (DBM-T +1.11%increase
) target to $11 from $9.25 with a “buy” rating. The average is $9.71.
“Doman has executed a bolt-on transaction of Southeast Forest Products, which will strategically improve their operations in the U.S. through the expansion of existing geographies in the South and Midwest. We estimate the transaction to be 9.0-per-cent accretive to our 2025 estimated EPS. Doman has done a good job post pandemic of structurally improving EBITDA margins (23-25E 8.0 per cent, 17-19: 5.6 per cent) and ROE (23-25E 12.5 per cent, 17-19: 7.8 per cent), which should result in a higher trading multiple. We are increasing our target price ... due to higher estimates and modestly increased target multiples that better align with historical averages.”