Echelon Capital - Target Raise and Canuck Acquistion Recent share price weakness in shares of Montreal-based graphene company NanoXplore Inc. (GRA-T) represents an opportunity for investors ahead of “multiple” catalysts, said Echelon Capital Markets analyst Amr Ezzat.
“NanoXplore Inc. announced [Thursday] morning the acquisition of Canuck Compounders Inc. and released F2022 guidance,” he said. “The sales guidance is broadly in-line with our forecast but below what we thought were overzealous and unrealistic Street estimates.
More importantly and impactful in our view is the formalized line of sight to positive EBITDA (FQ422) on the Canuck acquisition and improved customer outlook (i.e., graphene sales).
“We believe this to be a key inflection point that can see the stock move substantially higher.”
Mr. Ezzat sees the $9.3-million acquisition of Canuck Compounders providing strategic partnershops with end customers, noting: “NanoXplore’s acquisition strategy centres around providing an eventual channel for the sale of graphene powder as well as providing a mechanism to develop market credibility to accelerate adoption of graphene materials in thermoplastic.
Customers of acquired companies are generally open to evaluating graphene’s added value and, upon satisfactory performance, integrate graphene in their products.”
Though he trimmed his 2022 and 2023 financial estimates to account for “the ongoing impact from the pandemic on some of the Company’s markets,” the analyst said his long-term projections “on a quicker ramp of graphene sales.”
Maintaining a “speculative buy” recommendation, Mr. Ezzat raised his target for NanoXplore shares by $1 to $8.50. The average is $9.88.
“We believe a much more aggressive return profile is possible beyond our target price should the Company be successful in developing its energy storage initiatives,” he said.
https://www.theglobeandmail.com/investing/markets/inside-the-market/article-fridays-analyst-upgrades-and-downgrades-187/