Multiple Upgrades Though its first-quarter results, released after the bell on Wednesday, fell narrowly below expectations on the Street, a group of equity analysts on the Street raised their target prices for Mullen Group Ltd..
In response to the release, iA Capital Markets analyst Elias Foscolos cut his 2021 revenue projection, pointing to a slower-than-anticipated recovery in its Specialized & Industrial Services (S&IS) and Logistics & Warehousing (L&W) segments.
At the same time, he emphasized its recent acquisitions are likely to drive “significant” operating income growth and touted the value of its real estate holding.
That led him to increase his target by $1 to $15, keeping a “buy” recommendation. The average target on the Street is $13.75.
“Due to a delayed economic recovery in Canada causing weakness for certain areas of MTL’s business, our revised 2021 estimates project results closer to the low end of MTL’s guidance on an organic basis(pre-2021 acquisitions),” he said. “However, we expect these conditions to improve in H2/21, further boosted by recently announced acquisitions, driving substantial OIBDA growth into 2022. Building a full year of these acquisition sand the associated increase in debt into our valuation result in our increased $15.00 target.”
Elsewhere, RBC Dominion Securities’ Walter Spracklin increased his target to $15 from $13 with an “outperform” rating, while CIBC World Markets’ Kevin Chiang bumped his to $14.75 from $14.25 with an “outperformer” recommendation.
The Okotoks, Alta.-based company closed at $13.20 on Thursday.