TSX:ECN - Post Discussion
Post by
Blueswin on Aug 15, 2023 10:14pm
ECN Capital Target Lowered to $4.50 at National Bank, Outper
ECN Capital reported Q2-23 adj. EPS of $0.00 missing the Street's $0.04 (NBF at $0.05). The company also announced Skyline Champion is investing $138 million in it to acquire a 19.9% interest.
National Bank's Jaeme Gloyn believes that, despite the new strategic partnership, ECN's weak Q2 results and challenging near-term outlook (downgraded 2023 guidance) could impair sustained share price upside. Signs of execution towards strong 2024 guidance and favourable resolution of the ongoing RV & Marine (RVM) strategic review are crucial drivers, he adds.
Gloyn now forecasts ECN-adjusted EPS of $0.05 in 2023 (was $0.15, on weak Q2 and outlook) and $0.23 in 2024 (was $0.19, on upside from strategic partnership). However, higher execution risk, including macro uncertainty, drives NBF's target multiple lower to 12x (was 17x) on the 2024 EPS estimate. Price target moves to $3.50 (was $4.50).
Maintain Outperform.
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