Chemtrade Logistics Income 6 50 Convertible Unsecured Subordinated Debentures T.CHE.DB.E

Che was upgraded to outperform by CIBC - 9 dollars

[Savvy91]

Che was upgraded to outperform by CIBC - 9 dollars

There has been a large amount of hydrogen hype lately, enough that I’m going to write about it for the Globe Investor newsletter out later Monday. I see the potential for an investment bubble similar to lithium and cannabis.

Here’s CIBC (my emphasis),

“As of December 20, we upgrade Chemtrade Logistics to Outperformer (from Neutral), downgrade Superior Plus to Neutral (from Outperformer) and maintain Methanex at Neutral. We are updating our 2021 estimates and rolling out our 2022 estimates (modeling a muted H1/21 and a ramping recovery in H2/21 and into 2022). We do believe there is potential option value in a “new” hydrogen economy for SPB and CHE.UN, but the impact is limited primarily to by-product hydrogen production and we think the increase in carbon taxes will have a minimal impact… Though we do expect its results to be relatively soft in H1/21, we would argue that CHE.UN has high earnings torque to improving macro conditions in H2/21 and 2022 … With the improvement in industrial and fracking demand, we forecast EC segment 2022 EBITDA to be ~40% higher than 2020 levels. SPPC should also see a strong recovery from better regen demand (tied to driving trends). The 10%+ dividend yield (despite the dividend being slashed 50% this year) is attractive and we regard the dividend as safe (free cash flow payout of ~55% next year)”