FormerXBC Inc XEBEQ

Tough Q3? .... probably

[ZouZS3]

Canaccord Genuity analyst Yuri Lynk has reaffirmed his "buy" recommendation for Xebec Adsorption. The Globe's David Leeder writes in the Eye On Equities column that Mr. Lynk trimmed his share target by 50 cents to $4.50. Analysts on average target the shares at $4.54. Mr. Lynk says in a note: "In hindsight, our upgrade of Xebec on July 6, 2021, was premature. ... We expect another tough quarter in Q3/2021 as inflationary pressures and logistical issues could pressure margins on the legacy contracts. However, as we move into 2022, these contracts should be well into the start-up and commissioning phase and, therefore, less of a drag. At the same time, the company is beginning production of 30 BGX-Biostream RNG upgrading units, which are standardized modular units that are built in a plant and shipped in a container. This should improve execution (and margin) in 2022. Meanwhile, Inmatec is experiencing STRONG demand for its onsite nitrogen and oxygen generation products such that management aims to DOUBLE this business over 2 years. The service business is up on acquisitions while Hygear is slightly down."