TD ReportEvent WJX reported Q1/22 results that were above expectations.
Impact: POSITIVE
Q1/22 adjusted EBIT was $25.9mm — above consensus and TD, both at $21.0mm. The beat was driven by a combination of higher-than-expected revenue and margins. Adjusted EPS (f.d.) was $0.71 vs. consensus/TD at $0.54/$0.55.
Revenue was $439.5mm (+13.5% y/y) vs. consensus of $407.0mm and our estimate of $412.7mm.
Adjusted EBIT margin was 5.9% — above consensus/TD at 5.2%/5.1%. The beat vs. TD was driven by higher-than-expected gross margins (21.3% vs. TD at 20.1%), while SG&A as a percentage of revenue slightly underperformed (15.3% vs. TD at 15.0%).
Backlog was a record $540mm, +27.3% q/q (due to higher orders in most categories, including, in particular, construction, forestry, ERS and industrial parts), and +95.3% y/y.
Outlook: Wajax indicated that it is positioned to continue to grow in 2022, supported by its strengthened balance sheet and expanded product and service offerings. The company sees sound fundamentals in many of its key markets, bolstered by improving commodity prices and increased capital spending. That said, Wajax's positive market view is counterbalanced by COVID-19 risks and related supply-chain issues, which Wajax expects will remain a factor in 2022.
We have raised our 2022 estimates (driven in part by Q1/22's beat), while our 2023 forecast has also increased modestly. Our $27.00 target price remains unchanged. TD Investment Conclusion We remain constructive on Wajax's outlook over our forecast horizon and we continue to see the stock's valuation and dividend yield as attractive. We reiterate our BUY rating. 35 35 30 30 25 25 20 20 15 15 Jul-21 Sep-21 Nov-21 Jan-22 Mar-22 May-22 WJX-T: Price Company P