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Park Lawn Corp T.PLC

Park Lawn Corporation is engaged in providing goods and services associated with the disposition and memorialization of human remains. The Company and its subsidiaries own and operate businesses, including cemeteries, crematoria, funeral homes, chapels, planning offices and a transfer service. Its primary products and services are cemetery lots, crypts, niches, monuments, caskets, urns and other merchandise, funeral services, after-life celebration services and cremation services. Its products and services are sold on a pre-planned basis or at the time of death. It has one stand-alone funeral home located in Durham, North Carolina; one stand-alone funeral home and one on-site funeral home and cemetery located in Abingdon, Virginia; eight stand-alone funeral homes, two stand-alone cemeteries and one on-site funeral home and cemetery located in and around the Savannah, Tennessee area; three stand-alone funeral homes located in Brampton, Woodbridge and Toronto, Ontario and more.


TSX:PLC - Post by User

Post by retiredcfon May 17, 2023 7:57am
221 Views
Post# 35451869

National Bank

National Bank

National Bank's Mr. Evershed lowered his organic growth assumptions for the remainder of Park Lawn Corp.’s  fiscal year to align with guidance for a “roughly flat performance,” despite a stronger-than-anticipated top line in the first quarter.

He thinks the Toronto-based funeral home operator has seen difficult COVID-19-driven comps “quietly pass” and emphasized an outlook for a year-over-year decrease in mortality.

“PLC is now beginning to lap relatively easier comps in Q2 and onwards as COVID-19 entered a mostly steady endemic state a year ago,” he said. “Volume headwinds in the quarters ahead should thus be more muted, aligning with guidance for roughly flat performance.”

“Subsequent to quarter end, PLC acquired Speaks in Missouri, joining the mid-March addition of Meyer in Iowa and Nebraska. The two acquisitions represent eight new standalone funeral homes and one cemetery generating roughly $4-million in Adj. EBITDA. Management noted a robust pipeline, and with $127-million in available credit and access to capital if necessary, we believe PLC is in a prime position to accelerate out of the industry’s post-pandemic haze.”

Pointing to higher borrowing costs and a rise in net debt, Mr. Evershed trimmed his target for Park Lawn shares to $32 from $32.50 with an “outperform” recommendation. The average is $34.83.

“We rate PLC Outperform, as with the toughest comps in the rearview mirror and a plethora of levers available to management to push margins higher, we believe operations should trend positively from here,” he said.

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