Stifel Raise Target Following STEP Energy Services Ltd.’s announcement of the acquisition of four coiled tubing spreads in the U.S. for $20-million last week, Stifel analyst Cole Pereira raised his target for its shares to $11.75 from $11.50 with a “buy” rating, seeing it remaining “undervalued.” The average on the Street is $10.50.
“The company expects a payback on its investment in an attractive timeframe of 18-24 months,” he said. “STEP also announced that CEO Mr. Regan Davis will retire at the end of the month, and President & COO Mr. Steve Glanville will assume the role of President & CEO and will join the board. We believe this transition was expected, and view Mr. Glanville as well positioned to step into the CEO role. As we update our model for the acquisition and other housekeeping changes, our EBITDAS/sh and FCFPS estimates in 2023E increase by 2 per cent and 9 per cent, respectively.”