Desjardins Securities -G&M today Desjardins Securities analyst David Newman thinks shares of Parkland Corp. (
) have been “unduly punished,” believing it is “on the verge of an inflection point on the back of its proven business model and investments in Develop, Diversify and Decarbonize, which will drive robust growth, a fundamental shift in the portfolio mix and lucrative cash flow generation.”
He raised his financial expectations for the Calgary-based company in response to a non-deal roadshow following its Nov. 16 Investor Day event.
“Management laid out a highly compelling case that served to address many investor misperceptions while outlining its strategic plans for the next decade,” said Mr. Newman.
He believes Parkland is “well on track” to achieve its “ambitious” target of $2-billion in earnings before interest, taxes, depreciation and amortization by 2025. He also emphasized its growing free cash conversion, the diversification strategy of its energy transaction and its ESG initiatives.
Maintaining a “buy” rating for its shares, Mr. Newman increased his target to $54 from $50. The current average on the Street is $51.21.
“We believe PKI trades at an unwarranted discount of 6.7 times on 2022 EBITDA, but 6.5 times on its $1.6-billion run rate, vs peers at 8.8 times (many at more than 10 times, including ATD at 10.3 times),” he said.
“The stock price represents a compelling entry point for value investors.”
PARKLAND FUEL CORP
34.49-4.82 (-12.26%)
YEAR TO DATE