Globe says Pereira recommends accumulating Enerflex
The Globe and Mail reports in its Thursday, June 10, edition that Stifel analyst Cole Pereira believes Enerflex is likely to "inflect moving forward," even though it has lagged its oil field services peers "materially" during the recent energy sector recovery. The Globe's David Leeder writes that Mr. Pereira commenced coverage with a "buy" recommendation and $10.50 share target. Analysts on average target the shares at $11.09. Mr. Pereira says in a note: "We believe investors should consider adding to or taking positions in EFX due to: (1) an expected near-term recovery in its core U.S. engineered systems business; (2) improving earnings quality; (3) its clean balance sheet; and (4) potential ESG tailwinds. In particular, a recovery in the U.S. engineered systems business should lead to a positive step-change in earnings power that should bolster ROCE and support a valuation rerating from its current trading multiple of five times 2022 estimated EV/EBITDAS. ... We believe the primary factor for the stock to rerate higher will be the recovery in U.S. engineered systems, which we expect to occur over the next few quarters. With that in mind we think investors should take or add to positions at current levels."