FormerXBC Inc XEBEQ

RE:RE:Tough Q3? .... probably

[tamaracktop]

tamaracktop wrote:

ZouZS3 wrote:
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.

That highlighted statement is debatable.
Very debatable.

Have you noticed that virtually every analyst covering all the companies in this space has cited inflation and supply chain disruptions a concern?

Legacy contracts are a wildcard.
Is it not possible that the diminishing negative influence of legacy contracts more than offset inflation's cost on the bottom line?

You bet it is.
Look what they did to the 4th quarter numbers versus the most recent quarter.

And those costs are going lower and lower to disappear in the near future.