TSX:RUS - Post Discussion
Post by
ace1mccoy on Feb 12, 2024 8:15am
Scotia Hikes
* Scotia’s Michael Doumet hiked his Russel Metals Inc. (RUS-T -0.96%decrease
) target to $50 from $46.50 with a “sector perform” rating. The average is $49.88.
“RUS is increasingly breaking away from its correlation with metal prices and WTI,” said Mr. Doumet. “This shift, we think, is due to its successful capital allocation (in the last three years) and its runway for additional accretive investments: a clean balance sheet provides RUS with room to capitalize on opportunities (i.e., M&A, buybacks) when metal prices are soft and optimize profits when the backdrop is favourable (i.e., higher growth capex, WC investments). Further, we believe management’s desire to maintain a conservative balance sheet (through the cycle) reinforces this shift in investor psychology. Over time, continued success is likely to lead to (further) multiple expansion.
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