CIBCEQUITY RESEARCH
October 15, 2021 Earnings Update
PARK LAWN CORPORATION LIMITED
Continuing To Tap A Plentiful Deal Pipeline
Our Conclusion
PLC’s acquisition of three death care businesses in Tennessee and North Carolina is yet another example of the company’s ability to execute on a key pillar of its growth strategy. We expect PLC to continue tapping on its robust deal pipeline over the medium term – it still has less than 1% market share in an industry that is about 80% unconsolidated. Over the near term, we expect the waning pandemic to result in a slowing down of COVID-related activity levels, a normalization of per-call revenues, and some catch-up on expense
lines (e.g., travel & entertainment, marketing, pre-need sales). We also
adjust for a persistently strong CAD, as almost 90% of revenues are USD-denominated (we could see PLC switching its reporting currency at some point). We are fine-tuning downward our estimates through 2022. We are also bringing down our price target from $45.00 to $43.00 based on unchanged multiples applied to our 2022 estimates: 13.0x EV/EBITDA and 26x P/E. We maintain our Outperformer rating