OTCPK:TMBMF - Post by User
Post by
Alphaseeker1984on May 03, 2017 8:31pm
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Post# 26200849
TD target
TD targetTD has upped their target to $4.00.
Market has pretty much shrugged off the good news (58mm in adjusted EBITDA, SC markets booming, currency trending favorably, lumber prices on the rise, BEK performing well, etc...) so I guess we will wait another few months.
Tembec was very enthusiastic on the CC regarding the results for the rest of the year, margin's have reached a 20 year high and they are still trending higher. Jim mentioned that Q3 will be slightly lower than Q2 but Q4 will be a blockbuster. My guess is 50mm in Q3 and 75mm in Q4. That would get TMB's LTM EBITDA to 220mm. CAPEX in lumber will add another 35mm in EBITDA in the next 2 years. SC should keep improving while China's agriculture policy moves away from cotton production...perhaps adding anywhere from 25-75mm of incremental EBITDA. The remainder of TMB's products whould remain at their current levels. Note that Eldorado posponed their BEK line to 2020 which should help keep paper pulp prices high.
Add it all up and the 250mm+ EBITDA hypothesis seems intact. 500mm of debt equals $12.50/share on a EV/EBITDA basis using a multiple of 7x EBITDA.