Post by
retiredcf on Mar 01, 2023 9:05am
CIBC
Notwithstanding the raised target, this analyst remains at the bottom of the Street consensus. GLTA
EQUITY RESEARCH
February 28, 2023 Earnings Update
PARK LAWN CORP.
Q4/F22 Preview: Layering In Colorado, Wyoming and Missouri
Our Conclusion
We have updated our estimates to include acquisitions announced during,
and subsequent to, the quarter. Park Lawn is rated Neutral and our price
target is now $28 (from $27) on a slightly lower EBITDA estimate but higher
EV/EBITDA multiple (now 11x) to reflect a more favourable environment for
small-cap discretionary stocks.
Key Points
In the quarter, PLC made a number of tuck-in acquisitions in Kansas City,
Colorado and Wyoming. The company also announced an acquisition in the
Kansas City area subsequent to the quarter. The acquisitions should add a
combined ~$8MM to EBITDA, and we estimate cost $55MM-$60MM.
Peers, Carriage Services (CSV) and Service Corp (SCI), recently reported
Q4 results with sales and EBITDA above consensus. Management
commentary was positive on recent sales trends while 2023 guidance was
generally above Street estimates. Note that Q4 and Q1 face difficult Y/Y
comparisons because of the elevated death rate from COVID last year.
Park Lawn will report Q4 results on Thursday, March 2, after market close.
Management will host a conference call 1-888-506-0062 (passcode: 934271)
the following morning at 9:30 a.m. ET. On the call, we expect key topics to
include near-term sales trends in pre-need and at-need services,
expectations on cost inflation, and an updated view on the M&A pipeline.