GLTALongs. Burn the shorts. Still low share price. 10:07 AM EST, 02/16/2022 (MT Newswires) -- Shares of Ag Growth International Inc. (AFN.TO) rose more than 5% on Wednesday.
The Canadian food infrastructure company was upgraded to Sector Outperform from Sector Perform at Scotiabank.
Analyst Michael Doumet raised his target price on the stock to $45 from $39.
"The setup for AFN may be as good has it has been for a while," Doumet said in a note to clients.
The analyst said Ag Growth is trading at its lowest EV/NTM EBITDA multiple in more than a decade, has strong growth prospects, and should benefit from moderating steel prices.
"We think its leverage has peaked. And its margins are likely to improve from its 3Q21 low-point," Doumet said.
"Further, with one of the bin projects remediated, we see little incremental risk of negative surprises and believe AFN will look to fully resolve the issue in 2022. The wind-down of the bin incident and wind-up of profits should enhance FCF (~15% yield) and ROIC, accelerating the prospects for delevering and, therefore, aiding the shares to re-rate higher."
Ag Growth shares rose $1.76, or 4.9%, to $37.48 in Wednesday morning trading on the Toronto Stock Exchange.
(MT Newswires covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://www.mtnewswires.com/contact-us)
Price: 37.67, Change: +1.95, Percent Change: +5.46